JPMorgan reviews some foreclosures
NEW YORK — JPMorgan Chase is suspending certain foreclosures as it reviews the legitimacy of affidavits.
The bank is the second major company to take such action this month, underscoring a growing legal problem that could stall an already overloaded foreclosure process. It may mean that some homeowners lost their homes illegally.
JPMorgan says employees signed some affidavits about loan documents without verifying the files. The affidavits identify who holds the original mortgage note in foreclosure cases.
JPMorgan said it 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 the review is done in a few weeks.
Last week, GMAC Mortgage halted certain evictions and sales of foreclosed homes in 23 states to review those cases. The company said it found procedural errors in some affidavits.
“The error is not related to the accuracy of the underlying transaction or the ultimate decisions to have exercised the foreclosure proceedings,’’ GMAC said.
Yesterday, Fitch Ratings said it’s asking servicers about their internal processes for executing foreclosure affidavits. If it finds the process is lacking, Fitch will consider downgrading the servicer’s rating.