News


Attorney General asks banks to suspend foreclosure actions

Brown wants institutions to first demonstrate they're complying with state law

Following his office's negotiations with the state's top loan servicers and Friday's announcement by Bank of America that it is temporarily halting foreclosures nationwide, Attorney General Jerry Brown has called on the state's other lenders to halt foreclosing on California homes until the banks can demonstrate that they are complying with state law.

"All lenders should halt foreclosures until they clear up this mess and ensure that the process is fair and complies with California law," Brown said. "Bank of America has taken an important step, and the other major lenders should follow its lead."

California law prohibits lenders from recording notices of default on mortgages made between January 1, 2003 and December 31, 2007, unless, subject to limited exceptions, the lender contacts or tries diligently to contact the borrower to determine eligibility for a loan modification. A notice of default must include a declaration of compliance with California law.

In the past few weeks, Brown's office has been in discussions with Bank of America, Ally Financial, JP Morgan Chase, Wells Fargo and OneWest to ascertain whether they are complying with California law. Brown's office has called on those banks to show they are complying with state law before continuing with foreclosures.

JP Morgan Chase, the nation's third largest loan servicer, Ally Financial and One West have admitted that employees approved and signed foreclosure documents without first fully reviewing the borrowers' loan files. As a result, those borrowers lost their homes based on affidavits the bank never confirmed were accurate.

Ally Financial and JP Morgan have suspended foreclosures in 23 other states that, unlike California, require a court order for foreclosures.

Comments

Posted by R Nogg, a resident of another community
on Oct 9, 2010 at 8:21 pm

I am not in California but I have been reading all the "crap" about how Wells Fargo is confident it is handling every case with the utmost accuracy and I'm really starting to "gag" from this comment. I am one of their foreclosure mistakes and I am not going to sit here and not do anything about it. They are far from "ACCURATE" and it wouldn't be so bad if they had at least admitted that their may be some faults in their process but saying that they are near perfect is a big fat JOKE!


Posted by Joe, a resident of Ruby Hill
on Oct 9, 2010 at 8:29 pm

Don't buy a house you cannot afford and pay your bills. You should have had at least 1year of savings in the bank. Shouldn't have bought the expensive car and taken all those vacations. I know you and know the circumstances if your little problem. You're not man enough to speak to me about it.


Posted by good for you Joe, a resident of Downtown
on Oct 10, 2010 at 10:25 am

Well said Joe. I know many people who have been through short sales and foreclosures and cannot think of even one who did not bring it on themselves. Don't buy what you can't afford and pay your bills. Simple.


Posted by Member, a resident of Amador Valley High School
on Oct 11, 2010 at 8:52 am

The federal government implemented programs to force banks to make sub-prime loans to people who couldn't make the payments. Now the government wants to prevent the lenders from foreclosing, which is their only legal remedy. This is just going to delay getting the bad loans eliminated. In turn, that delays a recovery in the real estate sector.
It is reasonable to require a bank to do a foreclosure properly with the correct documents and notices. But stopping all foreclosures is not the solution.
This is just more of the government taking over more and more things.
Another foreseeable consequence of this is that banks are not going to want to make home loans if the government is going to interfere with the underwriting process (forcing the bank to make bad loans) and then interfere with the enforcement process (preventing foreclosures when the homeowner defaults).


Posted by Barnstormer, a resident of Danbury Park
on Oct 11, 2010 at 9:10 am

I agree that the banks need to comply with state law, but postponing the foreclosures will only exacerbate and prolong the housing crisis. All of those foreclosures will have to be dealt with sooner or later. The sooner the better so the country can return to some sort of normalcy not only in the housing situation, but in the entire economy.


If you were a member and logged in you could track comments from this story.

Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: *

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields

A Norman Rockwell Town
By Roz Rogoff | 7 comments | 1,354 views

David Brooks at his Best and Worst
By Tom Cushing | 11 comments | 909 views

Anti-fracking folks rail against railroads
By Tim Hunt | 29 comments | 813 views