U.S. banks including Bank of America Corp. and Ally Financial Inc. are facing pressure to address home-foreclosure practices as Federal Reserve Chairman Ben S. Bernanke said the central bank and other regulators are “intensively” examining financial companies’ procedures.
“We are looking intensively at the firms’ policies, procedures, and internal controls related to foreclosures and seeking to determine whether systematic weaknesses are leading to improper foreclosures,” Bernanke said today at a housing conference in Arlington, Virginia.
Attorneys general in all 50 states are jointly investigating foreclosure methods, including the use of so- called robo-signers who didn’t check material they were signing.
The following is a timeline of key events in the turmoil over foreclosures.
Sept. 17: Ally Financial’s GMAC Mortgage unit tells brokers and agents to halt evictions tied to foreclosures on homeowners in 23 states, according to a document.
Sept. 24: GMAC Mortgage tells Freddie Mac, the government- supported mortgage-financing firm, that foreclosures by the auto and home lender might have been faulty weeks before halting its own evictions, according to two people briefed on the matter.
Sept. 29: JPMorgan Chase & Co., the third-largest U.S. mortgage servicer, says it asked judges to postpone rulings in pending foreclosure cases while the bank reviews and possibly resubmits statements.
Oct. 1: Bank of America becomes the latest firm to delay foreclosures. The banks says it will investigate all affidavits in cases that haven’t yet gone to judgment in the 23 states where courts have jurisdiction over home seizures.
Oct. 4: PNC Financial Services Group Inc., the Pittsburgh-based bank, halts sales of foreclosed homes to review documents in its mortgage servicing procedures, according to a memo the bank sent to lawyers handling the lender’s foreclosures.
Oct. 5: Wells Fargo & Co., the biggest U.S. home lender, says it will opt against joining other banks in delaying foreclosures as it stands by statements made to courts.
Oct. 6: Ohio sues Ally Financial, claiming it used fraudulent practices in foreclosing on home mortgages. The state says it will seek penalties of as much as $25,000 for each violation.
Oct. 8: Litton Loan Servicing LP, a mortgage-servicing business owned by Goldman Sachs Group Inc., says it’s halting some foreclosures to review how they’re handled.
Oct. 8: Bank of America extends a foreclosure freeze to all 50 states.
Oct. 12: Ally Financial hires legal and accounting firms to do independent reviews of foreclosures across the entire U.S. As many as 9 million U.S. mortgages in the foreclosure pipeline or through the process may face challenges, Morgan Stanley says.
Oct. 12: President Barack Obama throws his support behind the state attorneys general looking into home foreclosures while rejecting a nationwide freeze on such seizures because of potential “unintended consequences,” says a White House spokesman.
Oct. 13: Attorneys general of all 50 states open a joint investigation into home foreclosures.
Oct. 13: JPMorgan probably will pay an “incremental” sum to settle foreclosure investigations and there’s almost “no chance” the bank made mistakes in seizing homes, Chief Executive Officer Jamie Dimon tells reporters on a conference call after posting quarterly results.
Oct. 15: “You could potentially be talking about hundreds of billions of dollars in losses,” James Ellman, president of San Francisco-based hedge fund Seacliff Capital, says about the principal reduction that may result from improper foreclosures.
Oct. 15: MetLife Inc., the insurer with more than 200 home-loan offices in the U.S., affirms the validity of documents the company used to seize homes after Moody’s Investors Service says the insurer will temporarily postpone foreclosure sales and that the firm’s foreclosure process had “irregularities.”
Oct. 15: Added costs caused by delays in foreclosures were “grossly distorted,” says Barbara Desoer, head of home lending at Bank of America.
Oct. 15: Bank shares fall for the third day amid speculation faulty mortgage documents may mean lenders will have to buy back millions of dollars in loans from mortgage-bond investors who successfully challenge the paperwork.
Oct. 18: Bank of America says it will resubmit foreclosure affidavits in 102,000 cases in which judgment is pending.
Oct. 20: Fannie Mae says it halted referrals to a Florida foreclosure-processing law firm whose court filings to support home seizures are being investigated by the state’s attorney general. Citigroup Inc. said that it also had suspended referrals to the Law Offices of David J. Stern PA.
Oct. 20: Housing and Urban Development Secretary Shaun Donovan says federal regulators haven’t found evidence of “systemic issues” in legal documents at the center of turmoil over home foreclosure processing.
To contact the editor responsible for this story: David Scheer at email@example.com.