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JPMorgan Chase to Restart Suspended Foreclosures
Posted By Carrie Bay On November 4, 2010 @ 5:15 pm In Foreclosure,Loss Mitigation,REO | No Comments
""JPMorgan Chase"":http://www.jpmorganchase.com will begin re-filing affidavits later this month for some 127,000 foreclosures that have been on hold because of ""robo-signing"" issues.[IMAGE]
Charlie Scharf, head of the bank's retail financial services unit, told a group of analysts and investors at a conference in Boston Thursday that the company will begin resubmitting affidavits in these cases within ""the next couple of weeks.""
JPMorgan stopped foreclosure proceedings in 40 states on roughly 127,000 loans in early October Ã¢â‚¬" 38,000 of which are in non-judicial states. Evictions of an additional 8,200 occupied REOs were also stopped.
Scharf says his company risks losing a couple million dollars each month the foreclosure proceedings are delayed. The re-filings should begin by mid-November and will take at least three to four months to complete, according to Scharf.
Bank of America says it has begun ""resubmission of 102,000"":http://www.dsnews.com/articles/bank-of-america-loses-73-billion-in-third-quarter-2010-10-19 cases affected by procedural errors. GMAC Mortgage has ""re-filed 9,523 affidavits"":http://www.dsnews.com/articles/ally-ceo-we-screwed-up-and-were-embarrassed-over-robo-signers-2010-11-03 with the courts, and is in the process of reviewing another 15,500.[COLUMN_BREAK]
Scharf says JPMorgan's reviews have identified two fundamental problems in its foreclosure process: affidavits were approved and recorded without the signer having personal knowledge of all information in the filing, and documents were notarized without being properly witnessed.
In ""his presentation"":http://files.shareholder.com/downloads/ONE/847571171x0x415409/c88f9007-6b75-4d7c-abf6-846b90dbc9e3/BAAB_Presentation_Draft_11-03-10_FINAL_PRINT.pdf, Scharf attempted to dispel what he said were common misconceptions about the affidavit issues. He stressed that borrowers who are current have not been foreclosed on and that all of the company's foreclosure decisions are ""based on materially accurate information"" that calls for repossession of the property.
JPMorgan has multiple checks and controls in place throughout the foreclosure process to confirm sufficient contact and modification efforts have been made and foreclosure decisions are appropriate, according to Scharf.
He also assured analysts and investors that all liens and records of ownership have been properly transferred.
Another myth, according to Scharf, is that foreclosures are being pursued too aggressively Ã¢â‚¬" he says they're not. On average, homeowners have not made a mortgage payment in over 14 months at the time of foreclosure.
Some have argued that servicers aren't able to cope with the high volumes of defaults Ã¢â‚¬" Scharf says his company can handle the workload.
Scharf noted in his presentation that JPMorgan currently has over 17,000 default employees with almost 13,000 involved in loss mitigation efforts. He added that staff members that are independent of the operational process are responsible for checking the loan status at least twice, once before a loan is referred to foreclosure and once before foreclosure sale.
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