49 AGs to investigate potential mortgage fraud

Michigan’s Attorney General Mike Cox joined 48 other attorneys general to announce an investigation into the lender processing (Alabama and the District of Columbia did not join in on the probe).

“Michigan has joined the multi-state working group looking at improper mortgage foreclosure practices, and the group includes 49 states and has representatives from attorneys general offices as well as state bank and mortgage regulators in 30 states,” said Michigan Attorney General spokeswoman Joy Yearout. “The genesis of the group is to investigate the questionable affidavits that have been filed in some states, but those affidavits are not used in Michigan.”

The problem does not appear to have any effect in Michigan, she said, but the state is joining to help bring attention to the issue and to join in a working group to work out a mechanism of oversight that might be helpful in Michigan.

Ben Mook, a reporter at The Daily Record, a sister publication of Michigan Lawyers Weekly, summed up the latest action:

Iowa Attorney General Tom Miller Wednesday unveiled the details of the multi-state mortgage foreclosure working group created to review the practice of “robo-signing” and other issues that have arisen against banks and mortgage processing firms.

Alabama was the only state not to join the group. The other 49 states, as well as state banking and mortgage regulators in more than 36 states, will look at whether mortgage servicers have improperly submitted documents to speed up the foreclosure process.

“This group has the backing of nearly every state in the nation to get to the bottom of this foreclosure mess, and we plan to work together as thoroughly and expeditiously as possible,” Miller said in a statement. “Since this issue affects peoples’ homes and has clear economic implications, this probe and its outcome need to be fair both to homeowners and also to lenders.”

Miller said the group’s scope could expand. He said submitting foreclosure documents without verification, or with false representation, as well as signing some legal documents without notarization might violate state laws and court rules.

“These are starting points, and it’s possible this group may limit, expand or change its objectives,” Miller said. “What’s important here is this is a cooperative and coordinated effort by states to address a serious problem. This is not simply about a glitch in paperwork. It’s also about some companies violating the law and many people losing their homes.”

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