Brown Demands JP Morgan Chase Suspend Foreclosures Unless It Can Demonstrate Compliance with California Law
LOS ANGELES, CA – October 4, 2010 – (RealEstateRama) — Attorney General Edmund G. Brown Jr. has demanded that JP Morgan Chase prove immediately that it is complying with state law or, if it cannot, halt foreclosing on California homes.
“I’m taking this action to further protect California homeowners on the brink of foreclosure,” Brown said, “JP Morgan Chase, like GMAC/Ally Financial, has admitted that its review of key foreclosure documents was a ruse.”
“I’m directing Chase to prove it is following the law before it continues foreclosures in California,” Brown added.
California law prohibits lenders from recording notices of default on mortgages made between January 1, 2003 and December 31, 2007, unless, subject to limited exceptions, the lender contacts or tries diligently to contact the borrower to determine eligibility for a loan modification. A notice of default must include a declaration of compliance with California law.
JP Morgan Chase, the nation’s third largest loan servicer, has admitted that employees signed affidavits in 56,000 foreclosure cases nationwide without first personally reviewing the contents of the borrowers’ loan files. As a result, those borrowers lost their homes based on affidavits the bank never confirmed were accurate.
This practice strongly suggests that any purported verification by JP Morgan Chase that it complied with California law before beginning foreclosures here is also questionable.
JP Morgan has suspended foreclosures in 23 other states that, unlike California, require a court order for foreclosures.
On Sept. 24, Brown sent a similar letter to Ally Financial, Inc., formerly known as GMAC, directing it to prove it is complying with California law or cease foreclosures in California until it can. The Attorney General’s office is in contact with Ally.
Brown’s letter to JP Morgan Chase is attached.
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- Brown’s Letter to JP Morgan Chase
[PDF 59 kb / 2 pg]
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