Update: A spokeswoman for Alabama’s attorney general just told me that Alabama is also signing on, and subsequently sent out a press release, reprinted at the bottom of this post.
Today, all 50 state attorneys general announced an investigation into the foreclosure fraud crisis. Here is the release:
It has recently come to light that a number of mortgage loan servicers have submitted affidavits or signed other documents in support of either a judicial or non-judicial foreclosure that appear to have procedural defects. In particular, it appears affidavits and other documents have been signed by persons who did not have personal knowledge of the facts asserted in the documents. In addition, it appears that many affidavits were signed outside of the presence of a notary public, contrary to state law. This process of signing documents without confirming their accuracy has come to be known as “robo-signing.” We believe such a process may constitute a deceptive act and/or an unfair practice or otherwise violate state laws.
In order to handle this issue in the most efficient and consistent manner possible, the states have formed a bi-partisan multistate group to address issues common to a large number of states. The group is comprised of both state Attorneys General and the state bank and mortgage regulators. Currently 49 state Attorneys General have joined this coordinated multistate effort. State bank and mortgage regulators are participating both individually and through their Multistate Mortgage Committee, which represents mortgage regulators from all 50 states. Through this process, the states will attempt to speak with one voice to the greatest extent possible. At the end of this statement is a list of the participating states.
Our multistate group has begun inquiring whether or not individual mortgage servicers have improperly submitted affidavits or other documents in support of foreclosures in our states. The facts uncovered in our review will dictate the scope of our inquiry. The Executive Committee is comprised of the following Attorneys General Offices: Arizona, California, Colorado, Connecticut, Florida, Illinois, Iowa, New York, North Carolina, Ohio, Texas, and Washington; and the following state banking regulators: Maryland Office of the Commissioner of Financial Regulation, New York State Banking Department, and the Pennsylvania Department of Banking.
The crisis stems from improper foreclosure documentation. In 23 states, mortgage servicers, working on behalf of banks, need to file affidavits testifying to personal knowledge of a homeowner’s financial situation with a court to continue with a foreclosure. Cases have shown those affidavits to be false, and other documentation has proven faulty in the states that do not require court supervision for foreclosure.
“This group has the backing of nearly every state in the nation to get to the bottom of this foreclosure mess, and we plan to work together as thoroughly and expeditiously as possible,” Iowa Attorney General Tom Miller, leading the 49-state investigation, said in a release. “Since this issue affects peoples’ homes and has clear economic implications, this probe and its outcome need to be fair both to homeowners and also to lenders.”
*Update: *Here is the press release from the Alabama attorney general’s office:
“To be clear, no violations of Alabama law have been alleged at this time. That said, we are troubled to see that mortgage lenders around the country were violating the procedures of our sister States. Accordingly, we are joining the national investigation (all 50 States) to ensure that the lenders’ wrongdoings did not extend beyond what is already known to encompass actions that violated Alabama law and thus adversely affected Alabama citizens. If the investigation does not uncover any wrongdoing under Alabama law, then the lenders have nothing to fear from us. If the investigation does uncover wrongdoing in Alabama, we stand ready to take the appropriate action. “