JPMorgan Chase halt foreclosures due to faulty paperwork
TEXT OF STORY
Kai Ryssdal: A report from the research firm RealtyTrac you may have heard of this morning that one of every four houses sold in the second quarter was in some stage of the foreclosure process. One of every four.
But the foreclosure steamroll did slow down a bit today. JPMorgan Chase says it’ll stop foreclosures on 50,000 homes so it can check for paperwork mistakes. Last week, Ally Financial did the same thing. If could give some home owners a chance to catch their breath, but it could also prolong the housing market doldrums.
Janet Babin reports from North Carolina Public Radio.
Janet Babin: JPMorgan Chase says the foreclosure papers may have been signed by people who didn’t read them. It’s the second straight week that a big mortgage servicer has confessed to sloppy paperwork.
Nicolas Retsinas is a real estate lecturer at Harvard Business School.
Nicolas Retsinas: It raises the question as to whether the servicers who were carrying out the foreclosures, followed their own rules, the rules that call for a personal knowledge of the files and the process.
After GMAC and now Chase, Retsinas says other big mortgage companies may also freeze foreclosures so they can dot Is and cross Ts. That could give some home owners a break — a chance to stay in their homes a bit longer.
Attorney Andrea Bopp Stark with Molleur Law Office represents some of the home owners who’ve filed complaints against GMAC. She says the foreclosure slow down has raised the stress level for some of her clients.
Andrea Bopp Stark: It causes extreme anxiety and distress to wonder, “Well, maybe this week I’ll be in my home, but what about next week?”
For Chase’s part, it says the review will only take a few weeks, and it believes the information in the foreclosure documents is accurate, so it’s unlikely people who’ve lost homes will get them back. But whether the flawed documents are due to error, shortcut or worse, many foreclosed homes will now be in limbo.
Rick Sharga with real estate data firm Realtytrac says that’s not good for people trying to buy or sell a home.
Sharga: The longer the foreclosure crisis is extended, the longer it’s going to take for the housing market to come back.
Sharga expects the number of foreclosure documents under review, will grow before the backlog ends.
I’m Janet Babin for Marketplace.
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