CommunityFDL Main Blog

JPMorgan “Systematically Reviewing Foreclosures”

Foreclosure notice across the street from a bank. (photo: NewsHour on Flickr)

Wow. JPMorgan told CNBC today that they would “systematically review all foreclosures” in their pipeline to check for discrepancies. If this gets replicated across the industry, then Tyler Durden is right that “the American foreclosure process is now effectively shut down.”

It won’t be long before struggling borrowers recognize the sudden leverage they have, and refuse to leave their homes. It doesn’t mean that the foreclosure mills and the lenders will stop trying to bluff them – they’re even using counterfeit court summons now to “prove” that they served the borrower. This allows lenders to foreclose on homes without even informing the homeowner, which we’ve seen in select cases. Tyler continues:

As Grayson’s office points out: “Apparently what’s happening is that private process servicer companies may not be serving people with summons, and are simply counterfeiting the documents so they can keep the fees without doing the work. That means that you could theoretically be foreclosed on without ever knowing there was even a foreclosure case against you.” What it also means, is that banks may have been participants in this outright criminal judicial fraud, which we are confident will be uncovered in many more cases, as this is highly unlikely to be an isolated case. And the ultimate outcome, as the Florida Bar News states, is that soon, the entire foreclosure process will halt, thereby creating a huge bottleneck to cleaning out excess inventory as more and more squatters are allowed to reside in properties that no longer pay their mortgages to anyone, now that it is obvious that nobody (ahem Freddie, but how else can you keep bailing out the banks, pardon, the GSEs, via fraudulent fund flows) owns the actual deed.

As these stories get more publicity, and as the lenders recognize their liabilities, people will get the message. The foreclosure system is fraudulent, and borrowers need not comply.

[Ed Note: The New York Times has more.]

Previous post

HRC responds to Congress.org's scathing "Rift widens among gay-rights groups"

Next post

Arizona's Prop 203: Pledge to Vote for Medical Marijuana

David Dayen

David Dayen