AG joins foreclosure inquiry | Arkansas Blog

Wednesday, October 13, 2010

AG joins foreclosure inquiry

Posted By on Wed, Oct 13, 2010 at 12:24 PM

Dustin McDaniel says he's joined 49 50 other attorneys general (Alabama's joined up) to investigate whether companies have foreclosed on homeowners using improper and sloppy paperwork.

“We realize that some foreclosures are necessary, but given the importance of the property right at risk, the process leading to a foreclosure is a serious one and should be above reproach,” McDaniel said. “Our office has joined this investigation in order to make sure that foreclosing entities have fully complied with our laws.”

An article on the mortgage business investigation in the New York Times says some fear the investigation will slow the recovery of the housing market.

Text of announcement on jump.

MCDANIEL JOINS MULTISTATE REVIEW OF FORECLOSURES

LITTLE ROCK — Attorney General Dustin McDaniel today announced that he has joined a multistate review into possibly improper practices within the mortgage service industry.

The group of attorneys general in 49 states, and state banking and mortgage regulators in 30 states, will explore whether individual mortgage servicers have improperly submitted documents in support of foreclosures. Specifically, the group will look into whether companies misrepresented on affidavits and other documents that they reviewed and verified supporting foreclosure documentation, whether companies signed affidavits outside the presence of a notary public, and whether the company was actually the appropriate entity to pursue a foreclosure, along with other possible issues regarding servicing irregularities or abuses.

“We realize that some foreclosures are necessary, but given the importance of the property right at risk, the process leading to a foreclosure is a serious one and should be above reproach,” McDaniel said. “Our office has joined this investigation in order to make sure that foreclosing entities have fully complied with our laws.”

Some of the concerns to be addressed — such as the practice of “robo-signing” affidavits — may not be applicable to some Arkansas foreclosures, which are pursued outside the court system through the state’s statutory foreclosure process.

However, McDaniel said participation in the review may help identify other concerns about the process.

The multistate group will contact a comprehensive list of individual mortgage servicers. The group's initial objectives include:
Put an immediate stop to improper mortgage foreclosure practices.
Review past and present practices by mortgage servicers subject to the inquiry.
Evaluate potential remedies for past practices and to deter future improper practices.
Establish a mechanism for more effective independent monitoring of future mortgage foreclosure practices.

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