Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Bank of America, JPMorgan Get Texas Subpoenas on Foreclosures

Oct. 26 (Bloomberg) -- Bank of America Corp., JPMorgan Chase & Co. and seven other banks or loan servicers were subpoenaed by Texas Attorney General Greg Abbott for information about their foreclosure practices, a spokesman said.

“The state is subpoenaing information and documents,” Jerry Strickland, the spokesman, said yesterday in an interview. He didn’t elaborate. The state also subpoenaed Ally Financial Inc., CitiMortgage Inc. and Wells Fargo & Co.

Abbott began investigating foreclosure practices in Texas following the disclosure of a December deposition in which an employee of Ally’s GMAC Mortgage unit testified that his team signed about 10,000 documents a month without verifying their accuracy. On Oct. 13, all 50 state attorneys general announced a joint investigation of foreclosures.

The Texas subpoenas followed letters sent by Abbott’s office to 30 loan servicers on Oct. 4, asking them to halt foreclosures in the state pending a review of their practices.

Abbott asked banks then to identify employees who filed faulty affidavits or other documents in the state and identify foreclosures that used such documents. He also asked lenders and servicers to halt all sales of properties previously foreclosed upon and stop all evictions.

Twenty-six of those companies responded to the letters, according to a spreadsheet of answers sent yesterday by Strickland.

JPMorgan Findings

JPMorgan “admits to finding affidavits signed by other personnel and not by the affiant,” Abbott’s office said in the document. “Also admits to some instances where signed without notary. Despite these issues, Chase feels the affidavits are accurate.”

The bank “plans to file replacement affidavits in all pending foreclosures and making changes to ensure affidavits are notarized legally,” according to the document.

Wells Fargo’s review of its practices “validated that processes/procedures are accurate,” the attorney general’s office said in its summary of that bank’s response.

Bank of America “is currently reviewing its processes to ensure that they comport with best practices,” according to the summary.

Ally responded to the attorney general in an e-mail that it had suspended foreclosures as of Oct. 6, the state said. Ally reported, “Working hard to resolve any problems. Once they know for certain that problems do not exist, they will resume foreclosure sales.”

Gina Proia, a spokeswoman for Detroit-based Ally, declined to comment on the subpoena.

‘Working Diligently’

“We’re working diligently to review and remediate the potentially affected files,” she said in an interview. “We have not found evidence of inappropriate foreclosures” in this review, she said.

The company is “only moving forward” on foreclosure sales that have been reviewed and “deemed appropriate,” she said.

Tom Kelly, a spokesman for New York-based JPMorgan, declined to comment. Shirley Norton, a spokeswoman for Charlotte, North Carolina-based Bank of America, said the company doesn’t comment on subpoenas. Vickee Adams, a spokeswoman for San Francisco-based Wells Fargo, didn’t immediately return a call seeking comment yesterday.

To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.