J P Morgan Chase Freezes Foreclosures
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Have you heard the latest…
They are freezing Foreclosures!
I just heard this on the news and looked it up. This could be huge because they are now calling for industry wide pauses in the foreclosure process. I think it is because we are finding errors and they have to modify or cancel some of our mortgages due to error!
Then I Found this from a fellow investor, Mike Butler, where you can read the rest of the story.
By Ariana Eunjung Cha
Washington Post Staff Writer
Wednesday, September 29, 2010; 8:47 PM
J.P. Morgan Chase, one of the nation’s leading banks, announced Wednesday that it will freeze foreclosures in about half the country because of flawed paperwork, a move that Wall Street analysts said will pressure the rest of the industry to follow suit.
The bank’s decision will affect 56,000 borrowers in 23 states where allegations of forged documents and signatures and other similar problems threaten to overturn court-ordered evictions. Yet the impact may be much broader, given J.P. Morgan’s stature within the industry. If other banks adopt the same approach, the foreclosure process in many parts of the country would grind to a halt.
Officials at Fitch Ratings, a credit rating firm that measures the health of companies, said the “defects” found in foreclosure documents at J.P. Morgan are industry-wide. Underscoring that concern, Fitch said it is considering whether to lower the grades it gives to the mortgage servicing divisions of the nation’s largest lenders.
“Over the next few weeks, we expect to see more and more companies come out with similar announcements,” said Diane Pendley, a managing director at Fitch.
The paperwork problems at J.P. Morgan mirror those uncovered last week at another large mortgage lender, Ally Financial. But J.P. Morgan’s decision is expected to have a much greater effect on the industry because it is held in high regard by its peers. By contrast, Ally, formerly known as GMAC, is a still under the cloud of a $17 billion federal bailout package that it has been unable to pay back.
Both firms are investigating whether foreclosure files were improperly or fraudulently assembled, and whether their employees failed to review the documents even as they signed off on them.
A growing number of homeowners – even those who missed their mortgage payments – are now scrambling to challenge the proceedings, weighing down an already overburdened court system.
You can see the rest on Mike’s site here http://tinyurl.com/287cjop
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