Major mortgage lenders are under scrutiny from state authorities across the nation over alleged improprieties relating to their foreclosure review processes.
Over the last several weeks, reports surfaced of several mortgage companies' employees who swore in depositions that they signed thousands of foreclosure documents without having read them. In this, they broke state laws and potentially deprived some owners of a chance to save their homes, which, for many, are their main asset and source of wealth.
The banks in question include Chase, Wells Fargo, GMAC and Bank of America, and law enforcement agencies from all states and the District of Columbia claim that these institutions rushed through the foreclosure process and failed to file proper paperwork. Legal experts cited by The Associated Press believe the banks will eventually be compelled to accept an independent monitor to ensure their compliance with foreclosure laws. They may also be subject to penalties and be forced to settle with some of the affected homeowners.
Lisa Madigan, Illinois Attorney General, wrote on The Huffington Post that the foreclosure system as practiced by these banks is "a Kafkaesque process that millions across America navigate as they turn to their lenders in hopes of a lifeline but instead are thrown an anchor."
According to RealtyTrac.com, the number of foreclosures in September was 1.1 percent higher than a year ago. It also increased by more than 2.5 percent since August.