Thursday, September 30, 2010

.P. Morgan Chase to Freeze Foreclosures over Flawed Paperwork

JPMorgan Chase announced yesterday that it will freeze foreclosures in about half the country because of flawed paperwork, the Washington Post reported today. The bank's decision will affect 56,000 borrowers in 23 states where allegations of forged documents and signatures and other similar problems are being used to try to overturn court-ordered evictions. Officials at Fitch Ratings said that the "defects" found in foreclosure documents at J.P. Morgan are industry-wide. Underscoring that concern, Fitch said that it is considering whether to lower the grades it gives to the mortgage servicing divisions of the nation's largest lenders. The paperwork problems at J.P. Morgan mirror those uncovered last week at another large mortgage lender, Ally Financial. Both firms are investigating whether foreclosure files were improperly assembled, and whether their employees failed to review the documents even as they signed off on them