Big Banks Stop Foreclosures In Process

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NEW YORK – JPMorgan Chase & Co. said it is stopping 56,000 foreclosures in process pending a review of whether employees properly signed and verified information in foreclosure documents.

The admission follows a similar disclosure last week by Ally Financial Inc.'s GMAC Mortgage that it had halted evictions and property sales in 23 states due to process defects. Those defects were described in a deposition by a GMAC employee, who said he routinely signed off on court documents without verifying the information or having a witness present.

JPMorgan Chase said some employees "may have signed affidavits about loan documents on the basis of file reviews done by other personnel – without the signer personally having reviewed those loan files." The mortgage servicer is reviewing documents in current foreclosure proceedings to verify that the affidavits and other documents "meet the standard of personal knowledge or review where that is required."

JPMorgan Chase said it also is working with independent attorneys to review its "affidavit preparation and signature process" to confirm that it meets "documentary and evidentiary standards." It has requested that courts not enter judgments in pending foreclosure proceedings until a review of all the cases is completed in the next few weeks.


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