As many as 40 state attorneys general (AGs) will announce an investigation into the servicing industry Wednesday, The Wall Street Journal reports, following up a weekend report from the Associated Press that a mass probe is coming. Several state AGs have already taken actions against servicers.
Connecticut's Richard Blumenthal asked the state's judicial department to freeze all foreclosures for 60 days. Ohio AG Richard Cordray filed a lawsuit against Ally Financial subsidiary GMAC Home Mortgage, alleging the servicer – the first to admit paperwork flaws – defrauded Ohio consumers and courts by filing false affidavits.
Texas' Greg Abbott instructed 30 servicers to suspend all foreclosures, as well as sales and evictions involving previously foreclosed properties, until the servicers complete a review of their processes. As part of the review, Abbott demanded that servicers identify all of their affiants, provide a list of foreclosures in Texas tied to ‘robosigned’ affidavits and explain remedial measures being taken.
North Carolina Attorney General Roy Cooper asked 14 servicers to confirm by end-of-business Tuesday that they had halted foreclosure proceedings in the state.
So far, five servicers have announced voluntary foreclosure freezes in judicial states, with Bank of America going beyond that and announcing a nationwide moratorium while it reviews its processes.
SOURCE: Wall Street Journal