Filings for Foreclosed Bank Owned Homes Questioned in New Jersey

by Peter Vernon on Foreclosure Crisis

Six mortgage lenders in New Jersey were issued court orders by the state's Supreme Court in relation to alleged irregularities in their processing of foreclosed bank owned homes. According to local reports, the lenders are facing potential suspension of operations due to the court order, which came after depositions emerged that the lenders used robo-signers or employees who sign foreclosure documents without checking facts first.

The lenders reportedly filed foreclosure-related actions for a combined 30,000 Newark foreclosed homes and other residences all around the state. One deposition reportedly revealed that a OneWest Bank employee had admitted signing around 750 foreclosure documents a week and taking only half a minute to read the documents.

In other depositions, employees reportedly testified that they signed documents related to New Jersey bank foreclosures for sale despite not having mortgage industry background and minimal understanding of what the paperwork were about. The six lenders ordered to make an appearance at the Trenton Superior Court on January 19 are OneWest, CitiResidential Living, Wells Fargo Financial New Jersey, Chase Home Finance, Bank of America subsidiary BAC Home Loan Servicing and Ally Financial.

According to Chief Justice Stuart Rabner, as far as he knows, the state is the first to exert such efforts against lenders. He also stated that it is important that actions are taken to make sure that judges do not just stamp documents related to foreclosed bank owned homes that are not reliable. Meanwhile, a spokesperson from Wells Fargo had stated that the firm will comply with the court order and will show why the foreclosures are justified.

As part of the broader effort to make sure properties in the state that are available to people purchasing foreclosure homes were processed correctly, Rabner also revealed that over 20 other mortgage lenders will be asked to submit paperwork to prove that foreclosure cases were handled properly. He clarified that these other lenders have not done anything wrong, but they were selected because each of them had handled around 200 foreclosure cases during the year.

Court officials have also stated that more than 90% of bank owned homes and foreclosures in the state were uncontested cases. The reason, they explained, is that majority of their owners were unable to afford attorneys.