TRENTON, N.J. (Legal Newsline) - The New Jersey Supreme Court has ordered six leading lenders to prove they are lawfullly processing foreclosures.
Chief Justice Stuart J. Rabner made the announcement on Monday, requiring the companies to file to the Court by Jan. 19 documents showing why the state shouldn't suspend their foreclosure actions.
The six lenders are: Ally Financial, formerly GMAC; BAC Home Loan Servicing, a subsidiary of Bank of America; Chase Home Finance, part of JPMorgan Chase; OneWest; Wells Fargo Financial New Jersey; and CitiResidential Living, a subsidiary of Citibank.
"It's important that the judiciary ensures judges are not rubber-stamping documents that may not be reliable," Rabner said on a conference call with reporters, according to the Star-Ledger.
Additionally, more than 20 lenders and service providers who filed residential mortgage foreclosure actions this year must document within 45 days that there are no errors or irregularities present.
The reports must outline how the companies handle, review and verify foreclosure applications, according to Rabner's administrative order.
According to the Newark newspaper, Rabner also sent a letter to the New Jersey Bar Association, as a reminder to lawyers that their signatures serve as certification of the filings and their contents.
The judge's actions were prompted by a nationwide investigation into mortgage foreclosures that launched in October, with state attorneys general and banking and mortgage regulators looking into so-called "robosigning" practices by several mortgage companies. The effort has since broadened into identifying and addressing additional alleged improper foreclosure practices.
Also on Monday, California Attorney General Jerry Brown announced that Wells Fargo has agreed to provide loan modifications worth more than $2 billion to thousands of California homeowners with "pick-a-pay" loans and to pay an additional $32 million to thousands of borrowers who lost their homes through foreclosure.
None of the loans were made by Wells Fargo. All were originated by World Savings and Wachovia, banks Wells Fargo acquired, the Attorney General's Office said.
In other related news, Iowa Attorney General Tom Miller and U.S. Attorney Nick Klinefeldt announced on the same day the creation of the Iowa Mortgage Fraud Working Group.
The working group, they said, will identify and investigate targets for criminal prosecution in the Southern District of Iowa and perform other important functions in the fight against mortgage fraud.
From Legal Newsline: Reach Jessica Karmasek by e-mail at firstname.lastname@example.org.
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