Fed fraud team to look into foreclosures

Oct. 19, 2010 at 5:46 PM
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WASHINGTON, Oct. 19 (UPI) -- White House Press Secretary Robert Gibbs confirmed Tuesday that federal fraud authorities were investigating U.S. lenders rushing foreclosure processes.

The Financial Fraud Enforcement Task Force is looking into the foreclosure debacle in which major lenders, including JPMorgan Chase & Co., GMAC Mortgage, Bank of American and others suspended foreclosure processing on growing concern that law firms handling the cases cut corners, including electronically signing documents.

Bank of America said Monday it would resubmit affidavits connected to 102,000 foreclosure cases in states where a judge's signature is required to complete a foreclosure. BofA said it had reviewed those cases and would resubmit them to courts starting Oct. 25.

Attorney generals from 50 states have initiated their own investigation. At a briefing at the White House, Gibbs said top officials from the Treasury Department, the Department of Housing and Urban Development and the Justice Department would meet Wednesday to review the issue. In addition, he said, "Our concern has been ensuring that the process adequately complies with the law. … That's what led the financial fraud enforcement task force to be involved in this process."

When asked if Bank of America had acted too soon in announcing it would resubmit cases to the courts, Gibbs said, broadly, that the concern was the process comply with the law. The White House is also concerned that delays not stall healing in the deeply troubled housing market.

"Our concern has been what that effect is for the housing market in the broader sense," he said. "Take a state like Florida. About a little more than a third of the housing transactions that are going on right now are individuals who are purchasing long-foreclosed, previously foreclosed homes," he said.

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