JPMorgan Chase to lift 40-state freeze on foreclosures
JPMorgan Chase & Co. plans to lift its 40-state freeze on home foreclosures later in November but said it would take several months to redo improperly filed paperwork.
The company, the No. 3 U.S. mortgage lender, imposed the freeze on about 127,000 delinquent home loans last month to assess whether they were being handled correctly.
The loans were made in states that require court orders for foreclosures and states with relatively complicated nonjudicial processes, but not in California and other states with streamlined procedures.
The bank said its review found that court affidavits supporting foreclosures had been signed by people who didn’t know the information they were attesting to, and that documents had been notarized without being properly witnessed.
In a slide show shown Thursday to analysts in Boston, Chase said it was hiring lawyers and auditors to put in place new processes to comply with state law and training employees in those processes with a goal of “100% quality control on refiled documents.”
Doing all that will take three or four months, Charlie Scharf, the bank’s chief of retail services, told the analysts. “I will say we don’t know yet … exactly what the cost is going to be,” he said.
Describing the errors found as procedural, Scharf said the foreclosures were justified and had been preceded by extensive reviews, repeated attempts to contact borrowers and efforts to modify loans.
The average Chase borrower losing a home has made “not one payment in 14 months,” he said.
Problems with foreclosure documents have led a number of loan servicers, including Bank of America Corp., Wells Fargo & Co. and Ally Financial’s GMAC Mortgage, to impose freezes or amend huge amounts of paperwork.
