States launch probe into foreclosures

States’ attorneys general have expressed concern that affidavits and other documents have been signed by people who didn’t have personal knowledge of the facts in the documents. Documents also were signed outside of the presence of a notary public, contrary to state law, the National Association of Attorneys General (NAAG) said today in a statement. 

“Our multi-state group has begun inquiring whether or not individual mortgage servicers have improperly submitted affidavits or other documents in support of foreclosures in our states,” the statement said. “The facts uncovered in our review will dictate the scope of our inquiry.”

The process in question is “robo-signing,” when affidavits allowing banks to repossess homes that are in default aren’t fully reviewed.

“We believe such a process may constitute a deceptive act and or an unfair practice or otherwise violate state laws,” the statement said.

Alabama is the only state that hasn’t joined the investigation, according to a list released by NAAG. 

Officials said, however, that all 50 states are represented in the effort through either attorneys general or state bank and mortgage regulators.

A growing number of states — Delaware, Texas, Maryland, Ohio, Connecticut, Florida, North Carolina, Iowa and Illinois — have been asking banks to halt foreclosures until any problems are solved. 

Bank of America, JPMorgan Chase, Ally Financial’s GMAC mortgage division and PNC Financial have all suspended home seizures in the 23 states where courts oversee foreclosures. Bank of America announced it was halting foreclosures in all 50 states to examine its processes.