Cooper wants foreclosures done right

Cooper wants foreclosures done right

Attorney General’s Office gathering, reviewing information about top 15 mortgage companies

October 13, 2010 – (RealEstateRama) — Raleigh: Attorney General Roy Cooper’s Consumer Protection Division is reviewing the top 15 mortgage companies’ foreclosure processes to make sure they are fair and legal as part of an ongoing investigation.

“Any mortgage company that’s using a flawed foreclosure process should stop until they correct the problems,” Cooper said. “We’re continuing our investigation to determine if lenders who say they are doing it right actually are, and if not, we’ll take appropriate action.”

As of today, 14 of the top 15 mortgage companies operating in the state have been in contact with Cooper’s office in response to letters sent earlier this month.

Of the mortgage companies that are part of the investigation, GMAC, JP Morgan Chase, Bank of America, PNC Mortgage, and PHH Mortgage have delayed foreclosures and halted foreclosure sales in North Carolina while the review is underway. OneWest Bank is postponing certain foreclosures while it submits re-verified affidavits.

Several other mortgage companies, including BB&T Mortgage, MetLife Home Loans, Sun Trust Mortgage, US Bank Home Mortgage, and Wells Fargo, indicate that their own reviews have not uncovered problems with their foreclosure processes. American Home Mortgage Servicing and HSBC are continuing their internal reviews and plan to respond in detail by the end of the week. Aurora Bank has not yet responded and Cooper’s office is preparing a follow-up demand.

Cooper is seeking additional information from the companies as part of his investigation into allegations that some may have filed foreclosure affidavits without properly reviewing them or verifying their accuracy.

Because many of the mortgage companies operating in North Carolina also operate in other states, Cooper is working with a multi-state group that is examining foreclosure practices across the country. The national group includes all 50 state attorneys general and 30 state banking and mortgage regulators, including the North Carolina Office of the Commissioner of Banks.

North Carolina law requires lenders to make a good faith effort to work out a loan modification before they proceed with a foreclosure. Cooper is concerned that if foreclosures are not being properly reviewed by lenders, some homeowners may not get a fair chance at loan modifications that could save their homes.

“Some foreclosures are inevitable and need to happen, but homeowners deserve a fair chance to save their homes when possible,” Cooper said.

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