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October 7, 2010

Miller Requests Mortgage Companies to Halt Iowa Foreclosures

(DES MOINES, Iowa)  Attorney General Tom Miller Thursday called on three major mortgage companies to halt pending foreclosure proceedings in Iowa while Miller investigates the companies’ apparent improper submissions of foreclosure documents filed in Iowa courts.

Miller’s office has contacted three major lenders, Ally Financial (formerly GMAC Mortgage), Bank of America, and JPMorgan Chase, to request that the companies suspend pending foreclosure proceedings, foreclosure evictions and sheriff’s sales in Iowa.  Miller also called on any mortgage company with knowledge of improper affidavits or other foreclosure documents submitted to Iowa courts, or with anything less than absolute confidence in its internal foreclosure review procedures, to immediately suspend pending foreclosure actions in Iowa.

On September 24, Miller announced an investigation into Ally/GMAC Mortgage after learning that a number of foreclosure case affidavits the company submitted to Iowa courts were apparently not based on personal knowledge, as required by Iowa law.  Several additional lenders have since publicly disclosed that they routinely submitted unverified foreclosure affidavits in Iowa and elsewhere.  Miller intends to seek information about the lenders’ foreclosure review policies and practices, and verification procedures.

“Media reports continue to emerge with troubling information about how several mortgage companies handled foreclosure cases here in Iowa,” Miller said.   “There appears to be an emerging pattern of careless and perhaps cavalier attitudes by a growing number of lenders when it came to taking peoples’ homes,” Miller added.  “This is an affront to Iowans facing foreclosure, and it’s also an affront to Iowa’s court system.”

Miller, who chairs the 13-state State Foreclosure Prevention Working Group, has assigned staff to convene a separate group of bipartisan state attorneys general and state banking regulators to coordinate states’ reviews and responses to the troubling disclosures by mortgage companies.  Miller’s staff has also been in contact with federal regulators and investigators, including the U.S. Justice Department, to assist with a coordinated response.  Iowa is the lead state in this multi-state effort.

As a judicial foreclosure state, creditors routinely submit affidavits to Iowa courts in support of motions for summary judgment in the creditors’ favor.  Improperly reviewed and submitted foreclosure cases may violate Iowa’s Consumer Fraud Act, and may raise other potential legal issues regarding individual cases, Iowa court procedures and state law.

“Iowans facing foreclosure expect it to be a fair process, and so do I,” said Miller.  “I want to ensure that mortgage lenders are following the law and that Iowa families facing foreclosure have every reasonable chance to stay in their homes.  No one should lose their home simply because a mortgage company cut corners on the paperwork.”

Iowans who believe their current or past foreclosure cases are affected or may have been affected by improper affidavit verification, may contact the Consumer Protection Division at 515-281-5926, or outside the Des Moines area at 1-888-777-4590.  Consumers may also send an e-mail to:

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