Dozens of states’ Attorney generals are ready to announce a joint investigation into some of the US’s biggest lenders on Wednesday. The investigation will stop short of calling for a general moratorium on all home foreclosures in the US, according to officials.
Included in the investigation will be Virginia, Ohio, California and Maryland among others and it will focus on lenders JP Morgan Chase and Bank of America in the initial stages. Ally International will also get a look over, and all the institutions will be investigated as to whether or not they made fraudulent or misleading statements which led to the eviction of thousands of struggling homeowners during the housing crisis.
Greg Zoeller, Attorney General for Indiana, said that the preliminary focus will be on the “robo-signing” of foreclosure documents by industry employees, without first going over the files, as they are legally obliged to do. There is also the question of forged signatures and improper notarization standards, which has been alleged by homeowner attorneys.
Law enforcement officials say that the findings of the investigation could be used to modify how lenders process foreclosures, as well as result in civil penalties for lenders, who may have violated unfair or deceptive trade practices laws.
The multi-state investigation comes as a growing number of lenders are halting foreclosure evictions while they review foreclosure procedures within their firms. The states are planning to share information while they coordinate the investigation, but are proceeding with caution, wary that there could be ‘inadvertent consequences’ should the situation develop into a nationwide freeze.
