Review Finds Possible Flaws in More Than 138,000 Bank Foreclosures

The nation’s biggest banks may have put the huge $25 billion settlement over bad foreclosure practices behind them, but that doesn’t mean their mortgage troubles are over.

A separate review — this time by independent consultants on behalf of the Office of the Comptroller of the Currency — flagged more than 138,000 cases for possible flaws in the foreclosure process at the nation’s largest mortgage servicers. Those include foreclosures involved with the so-called robo-signing scandal, in which bank representatives churned through hundreds of documents a day in foreclosure proceedings without reviewing them for accuracy.

The review is part of a broader crackdown by regulators on sloppy, inaccurate documents used in foreclosure proceedings. Last November, the major mortgage servicers began to comb through foreclosure records in an effort to spot any containing problems with documentation as part of a broader settlement they reached in April 2011 with the Office of the Comptroller of the Currency. As part of that process, the banks had to hire independent consultants to conduct the review.

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