Crossposted from DownWithTyranny
Last week we learned that, under intense pressure from Congressman Alan Grayson and other determined congressional and executive watchdogs, Bank of America decided to join banksters JPMorgan Chase and GMAC in suspending foreclosure processes in 23 states that “weren’t reviewed properly.” How many illegal foreclosures have already forced families out of their homes? It’s why Marcy Kaptur (D-OH), early in 2009, told her constituents to stay put in their homes if some crooked bankster tried to force them out.
In the video above, Rep. Grayson explains, in layman’s terms– and with horrifying details– what kind of unconscionable fraud the banks have been up to. Even the staid old NY Times has taken note of the scandal this week.
The foreclosure machinery that has forced millions of Americans out of their homes is beginning to seize up as some lenders and their lawyers are accused of cutting corners in their pursuit of rapid home repossessions.
Evictions are expected to slow sharply, housing analysts said, as state and national law enforcement officials shine a light on questionable foreclosure methods revealed by two of the country’s biggest home lenders in the last two weeks.
Even lenders with no known problems are expected to approach defaulting homeowners more cautiously and look more aggressively for resolutions short of outright eviction.
Despite the turmoil, some economists said the breakdown could ultimately lay the groundwork for a real estate recovery.
Stricken neighborhoods across the country, for example, could benefit. One big factor undermining home sales is fear of a large number of foreclosed homes coming to the market. If the foreclosures are delayed or never happen, housing prices might find a floor.
…As more defaulting homeowners become aware of the lenders’ problems, they are expected to hire lawyers and challenge the proceedings against them. And if completed foreclosures were not properly done, families who bought the troubled homes could be vulnerable to claims by the former owners.
Apparently alarmed about such a possibility, one of the major title insurance companies, Old Republic National Title, has sent a bulletin to agents saying that “until further notice” it would not insure title to properties foreclosed upon by GMAC Mortgage, the country’s fourth-largest home lender and one of the two big lenders at the center of the current controversy.
GMAC declined to comment, and Old Republic representatives did not return calls.
GMAC has acknowledged legal missteps in processing mortgages, and JPMorgan Chase has acknowledged the possibility of missteps, and both have suspended all foreclosures in the 23 states where they need a court’s approval. That’s 56,000 in the case of Chase alone; GMAC declined to provide a number.
Attorneys general in half a dozen states are demanding action or opening investigations. The Treasury Department said Thursday it was asking regulators to look into “these troubling developments.”
“We’re seeing a fundamental breakdown in the system, because no one cared that much about getting things right,” said Representative Alan Grayson, a Democrat of Florida, who unsuccessfully asked the Florida Supreme Court to halt all foreclosures in that state.
Grayson, of course, was maligned and viciously slandered again and again by Fox News for having the temerity to interfere. However, after Grayson got Florida to act, other states did likewise. Friday Connecticut Attorney General Richard Blumenthal ordered a moratorium on all foreclosures by all banks for two months and California Attorney General Jerry Brown ordered J.P. Morgan to prove it is following the law before it continues foreclosures in California.
[I]n Connecticut, Blumenthal said in a statement that he is investigating J.P. Morgan Chase and Ally, formerly GMAC, which is the recipient of a $17 billion federal bailout and majority-owned by the U.S. Treasury, as well as other lenders.
He said the actions of J.P. Morgan and Ally are a “possible fraud on the court undermining the integrity of the legal process and consumers’ ability to fight foreclosures.
“This freeze should stop a foreclosure steamroller based on defective documents and enable effective remedies,” Blumenthal said.
It’s worth noting that Michael Moore, in a kind of open letter to the fractured and bumbling Democrats, laying out a roadmap for salvaging the midterms and turning them into a landslide victory instead of what pundits are predicting, calls for just this kind of action in the 3rd of 5 suggestions:
3. Announce a Moratorium on All Family Home Foreclosures.
Last month (August) there were more home foreclosures than in any month in U.S. history. Worse than any month in the worst year ever, 2009. The bleeding hasn’t stopped– it’s only gotten worse. And now, this week, two of the largest crime organizations who are throwing hundreds of thousands of people out of their homes (GMAC and JPMorgan Chase) have been forced to momentarily stop doing this. It turns out, they don’t really have the paperwork to prove they actually own these houses! It’s madness. So if you do one thing for the middle class this week, do this. It will take an hour of your time to draw up the decree and issue it. We’d rather watch It’s a Wonderful Life than Poltergeist.
Obviously, with corporate shills like Steny Hoyer and his collection of mangy, bribe-hungry Blue Dogs, having so much say in the Democratic Party, this is never going to happen. It’s Sunday, a very good time to get Grayson’s back; he about all we’ve got standing between us and what Frank Rich referred to today as “the billionaires and corporate interests that have been steadily annexing the Tea Party movement and busily plotting to cash in their chips if the G.O.P. prevails… Wall Street potentates and corporate titans.”