Baltimore Sun Articles

Officials call on mortgage firms to temporarily stop foreclosures O’Malley, Cummings and Gansler ask servicers to review their process and report to the state

Maryland’s governor and attorney general and a Baltimore congressman jointly called Monday on mortgage companies to voluntarily halt foreclosures in the state until the firms can say for certain that they are following state law.

The officials were responding to widespread reports that executives with national companies have signed many legal documents for foreclosure cases without verifying that the information was accurate. Bank of America said Friday that it would delay foreclosures in 23 states as it investigated its process, following similar announcements by JPMorgan Chase and GMAC Mortgage. Maryland was not among the states.

Several states, including Massachusetts and Iowa, have launched investigations into documentation. Analysts have speculated that foreclosures could grind to a near halt in those 23 states — and possibly elsewhere — as lenders rush to determine whether they have been following rules.

Gov. Martin O’Malley, Attorney General Douglas F. Gansler and Rep. Elijah E. Cummings together sent letters to seven of Maryland’s largest mortgage servicers late Monday, saying they were “seriously concerned” that firms might be violating state law. In Maryland, lenders’ representatives must file affidavits stating the amount due and whether the borrower was considered for a loan modification, among other information.

“It is essential to ensure that these affidavits are not turned over to ‘robo signers’ for execution before, rather than after, a problem is discovered,” the officials said in their letter. “Since there is no redemption period in Maryland after a foreclosure sale is ratified, a foreclosure results in permanent damage to Maryland families, making it critical that the accuracy of the foreclosure filing is verified prior to pursuing the action.”

The three officials called on lenders to “re-examine” their foreclosure processes in Maryland and report to the state by Oct. 18 about how they will ensure their affidavits are accurate. The letter asks lenders not to start foreclosure proceedings, go to auction or evict any homeowners until the review is complete.

Shaun Adamec, a spokesman for O’Malley, said the governor was also looking into other options — including a temporary ban on foreclosures. Cummings sent a letter to O’Malley and Gansler over the weekend urging a moratorium for at least 60 days.

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