JPMorgan Chase has temporarily stopped foreclosing on more than 50,000 homes so it can review documents that might contain errors. This is the second major company to take such action this month. It is possible that this action could stall an already protracted and over-burdened foreclosure process in the short run. If the problems turn up at more of the largest mortgage companies, a foreclosure crisis that’s already likely to drag on for several more years could persist even longer.
GMAC Mortgage LLC last week halted certain evictions and sales of foreclosed homes in 23 states to review those cases. The company said it found procedural errors in some foreclosure affidavits.
Janna Herron and Alan Zibel, AP Real Estate Writers, On Wednesday September 29, 2010, 7:34 pm EDT wrote:
After GMAC’s announcement, attorneys general in California and Connecticut told the company to stop foreclosures in their states until it proves it’s complying with state law. The Ohio attorney general this week asked judges to review GMAC foreclosure cases. And in Florida, the state attorney general is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases.
The issue is also gaining attention on Capitol Hill. Last week, Rep. Barney Frank, D-Mass. and two other lawmakers wrote to Fannie Mae, urging the government-controlled mortgage giant to stop working with so-called “foreclosure mill” law firms under investigation for document fraud.
“Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?” the lawmakers wrote.
A Fannie Mae spokesman said the company is reviewing the issue.
JPMorgan acknowledged Wednesday that its employees signed some affidavits about loan documents without personally verifying the files. These affidavits verifies the accuracy of the loan information, including who owns the mortgage. JPMorgan spokesman Kelly said the bank believes the information in the affidavits is accurate, and that the affidavits were prepared by “appropriate personnel.”
The bank asked judges not to enter judgments against homeowners facing foreclosure until it completes its review of the problem. JPMorgan expects the process to take a few weeks.
The way mortgages are packaged and sold to many investors as securities can make it hard to determine who has the right to foreclose on a homeowner.
In some states, lenders can foreclose quickly on delinquent mortgage borrowers. But 20 states use a lengthy court process for foreclosures. They require documents to verify information on the mortgage, including who owns it. Florida, New York, New Jersey and Illinois are the biggest states with this process. Christopher Immel, a Florida lawyer who represents homeowners, said people who already have lost homes could sue their lender, alleging errors in documents.
In August, a judge in Duval County, Fla., ruled that JPMorgan could not foreclose on two homeowners. The reasoning was that Fannie Mae carried the mortgage on its books and JPMorgan Chase only collected payments on the loan. JPMorgan Chase had identified itself as the owner of the loan.
More lawsuits could come soon. In May, JPMorgan employee Beth Ann Cottrell said in a deposition that she and her staff of eight signed about 18,000 legal documents a month without reviewing every file. In a similar testimony, GMAC employee Jeffrey Stephan said he signed 10,000 documents a month without personally verifying the mortgage information.
“It’s very realistic to believe that this is a standard practice in how they go about foreclosures in certain states,” said Immel, whose law firm took Cottrell’s and Stephan’s depositions.
Zibel contributed to this report from Washington.
Do you remember the funny animated Walt Disney movie “The Emperor’s New Groove”? It was my son’s favorite movie for awhile (along with Walt Disney’s “Goofy”.) Anyway, remember the scene early in the movie that show’s someone distracting the emperor? The emperor was no longer focused. As the movie portrayed it, the distraction made the emperor fall out of his “groove.” The poor little man had “thrown off” the emperor’s “groove” and, in turn, they guards threw the little man out the window.
So it is life. We have so much going on for us. There are so many places we can put our time and attention. So many sirens call us to turn here, turn there. And the temptation of distraction is HUGE. In fact, I believe that addictions to anything are about distraction. Somehow I think it is human nature that we seem to think it is fun to be distracted. In a way, I think it is a mechanism to keep us from achieving our dreams… the FEAR FACTOR of SUCCESS.
Web-surfing is great, right? Aren’t we fortunate to have access to the world at our fingertips? (Well, obviously it can be a humongous distraction. But used right, it is like a surgeon’s knife that can help us carve out what we really need to support our efforts.) This morning I was reminded why we need to stay focused and find our niche and then work it. The following article was written by Speare Valasakos, a seasoned real estate broker from California. He stresses this very thing, in his blog/article “1 Simple Shift = More Real Estate Leads”
I quote a portion of what he says to illustrate my point.
“Do you know the single most important factor that will determine the effectiveness of your marketing, and the profitability of your entire real estate business?
It’s simple, actually…
Choosing the right niche.
First let’s talk about why choosing a niche is one of the best ways to boost your income, and then we will list some of the hottest real estate niches that desperately need agents to handle all of the surplus clients right now.
When you choose the right niche you instantly set yourself apart from the other agents in your area.
Here is a short list of just a few of the benefits:
o You become the “go-to” expert on that subject in your community
o Referrals flow in because agents and other professionals rely on you for your expert advice
o Your marketing is targeted and focused
o Internet advertising is easier because potential client will search for your “keywords”
o Your marketing will bring in more revenue for every dollar spent
o You will instantly multiply the effectiveness of your marketing
o It is easy to build a busy team because any potential clients who need to solve that specific problem will want to work with an expert
o It easy for you to create systems to expand your business because you understand your niche and can distill it and teach it to your team
It may seem counterintuitive but marketing that focuses on a very specific target market will always be much more effective than general, “one size fits all” marketing.”
Alright, it is me, Oliver, again. What will be your focus? If you want to succeed focus is everything. Target your “groove” or “niche”. Step out and be a leader.
This principle applies to all aspects of life. Get a passion for something and pursue it like there is no tomorrow.
In real estate, the field is too big to be all things to all people. If you are a Realtor, decide what types of properties or what types of clients you are going after. Narrow it down, then go after that market. Same with real estate investors. If you want to do Short Sales, focus on that. If you want to acquire rentals, decide what your focus will be… single homes or multi-family dwellings. If the latter, once again, narrow it. Will you cater to small units (2-4 dwellings in a unit) or a whole apartment complex? While you can have success in both you will find by specializing your potential for success is much greater. Now, go do it!
