Major Lenders Face Suspension for Home Foreclosures in New Jersey

December 21, 2010 / Russell Legato, Residential Property Analyst

JPMorgan Chase, Citigroup, Ally Financial, OneWest, Wells Fargo, and Bank of America are facing possible postponement of home foreclosures under a judge’s order in New Jersey by January 19, 2011. New Jersey Supreme Court Chief Justice Stuart Rabner announced the court order on Tuesday, Dec. 21, 2010.

Major Lenders Face Suspension for Home Foreclosures in New Jersey

Together, the six major loan servicers and mortgage lenders filed for about 30,000 home foreclosures actions this year in New Jersey.

Chief Justice Stuart Rabner’s court order follows a report presented to the Supreme Court, which cites court filings and depositions in other states that shows a systematic abuse in the filing of home foreclosures, including the “robo-signing”, where employees signed numerous documents without checking it for accuracy.

The six firms are ordered to appear in court on January 19, 2011 to establish why the handing out of uncontested home foreclosures the companies have filed must not be suspended by the court.

Lawyers in the case must also certify that they have reached out to employees, and prove that they have individually reviewed all the documents.

According to a statement by Chief Justice Stuart Rabner in a conferenece call, the judiciary should ensure that the six companies are not “robo-signing” documents for home foreclosures, which are questioned for its reliability and accuracy.

Rabner also said that the state of New Jersey is the first to take such action.

There are also 24 other loan servicers and mortgage lenders with 200 home foreclosures this year that are facing the same action, which are also expected to show and prove that there are no abnormality on their foreclosure proceedings.

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