GMAC, Bank of America and JPMorgan Chase have been in the headlines again recently.  Employees have admitted to signing off on foreclosure documents without having actually read them, leading to renewed questions about the banks’ foreclosure practices.

Bank of America locked out a Texas homeowner last year and turned off his power as part of a foreclosure proceeding.  BofA admitted the mistake, conceding that the home was owned outright, and is fixing the mistake at its own expense, a spokeswoman tells the Sun Sentinel of Ft. Lauderdale.  Small comfort to the homeowner, who came home to 75 pounds of spoiled fish in his refrigerator.

A Pittsburg-area homeowner, who was current on her payments, is suing the bank.  In 2009, not only did the bank lock her out, but decided to shut off the utilities and take her pet parrot.  The bank has apologized for the “stress” the owner incurred.

And recently, GMAC’s mortgage unit, Ally Financial, told brokers and agents to halt foreclosures in 23 states, including Indiana.  Bloomberg News obtained a memo dated Sept. 17, stating that GMAC may “need to take corrective action in connection with some foreclosures.” Ally Financial spokesman James Okecki confirmed the memo.  Evictions, cash-for-key transactions and lockouts are being stopped immediately. Sales of prior foreclosed properties are also being suspended.  According to the letter, preferred brokers are to notify Buyers that closing dates will be extended by 30 days, and that buyers are able to cancel purchase agreements and receive deposits back.

JPMorgan Chase acknowledged some affidavits about loan documents were signed by Employees without personally verifying the files.  These affidavits identify who holds the original mortgage note in foreclosure cases. According the Associated Press, Chase is now suspending more than 50,000 foreclosures to review the legitimacy of legal documents in those files.

The company expects the process to take a few weeks and asked judges not to enter judgments against homeowners facing foreclosure until files can be reviewed.  The company believes the information in the affidavits is accurate and that the affidavits were prepared by "appropriate personnel," said spokesman Tom Kelly.

These are merely small sample of questionable bank foreclosure practices. Bank of America, GMAC and JPMorgan Chase are not alone in this issue.  Currently, 1 in 488 housing units in Indiana received a foreclosure filing in August 2010.  The Evelo Team can help answer questions and provide guidance for those facing foreclosure - contact us today at 317-863-4663.