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Chase is latest bank to halt foreclosures to examine signatures' authenticity

SAN FRANCISCO —JP­Morgan Chase is stopping some foreclosures to review how employees in its mortgage-foreclosure operations sign affidavits about loan documents.

The news comes about a week after GMAC Mortgage, a unit of Ally Financial, stopped foreclosures in 23 states to deal with a similar problem.

Since Chase bought the failed Washington Mutual, it has become one of the most active lenders dealing with Florida home foreclosures and loan modifications.

At the center of the controversy are employees of mortgage lenders or servicers who sign affidavits supporting foreclosures, which have to be cleared by judges in many states.

With so many foreclosures to process, there's concern that such affidavits are signed without verifying whether loan documents and other records have the correct information. The integrity of the process is a key component in how judges decide that people's houses can be taken and given back to the bank.

JPMorgan Chase spokesman Thomas Kelly said that in some cases, employees in Chase's mortgage-foreclosure operations "may have signed affidavits about loan documents on the basis of file reviews done by other personnel — without the signer personally having reviewed those loan files."

"As a result, we have begun to systematically re-examine documents we have filed in current foreclosure proceedings to verify that the affidavits and other documents meet the standard of personal knowledge or review where that is required," he added.

The review should be done in a few weeks, and JPMorgan will submit updated affidavits to the courts if needed, he said.

Chase is latest bank to halt foreclosures to examine signatures' authenticity 09/29/10 [Last modified: Wednesday, September 29, 2010 7:43pm]
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