Foreclosure halt as lenders face allegations of fraud. Congress has asked Ally Financial and JPMorgan Chase to halt and stop foreclosure proceedings in all 50 states. The bank lending companies have already suspended foreclosure proceedings in 23 states.
Bank of America announced it will temporarily halt the sale of foreclosed homes in all 50 states as it reviews paperwork. JPMorgan Chase and Ally Financial are defending allegations of fraudulent home foreclosures. In fact, they may face the most financial peril from investigations by state attorneys general.
Authorities in at least seven states are probing whether lenders used false documents and signatures to justify hundreds of thousands of foreclosures, and the number of these inquiries will grow, according to state officials and legal experts.
“You’re going to see a tremendous amount of activity with all the AGs in the U.S.,” Ohio Attorney General Richard Cordray said. “We have a high degree of skepticism that the corners that were cut are truly legal.” In Ohio, penalties include fines up to $25,000 per violation, with each false affidavit or document considered a violation, according to state law enforcement officials. In Iowa, fines rise to a maximum of $40,000 for each violation.