Chase to resume foreclosures this month
JPMorgan Chase & Co., which had put foreclosures on hold in 40 states and the District of Columbia to assess whether it was following proper procedures, plans to resume seizures of homes "in a couple of weeks," the New York bank told a meeting of analysts.
Chase, the third-largest U.S. mortgage lender, imposed the freeze on about 127,000 delinquent loans last month in 23 states that require court orders for foreclosures as well as in states with more complicated non-judicial processes. California, which has a streamlined process, was not among the states where Chase stopped foreclosing.
The bank told analysts Thursday that it found problems: Court affidavits supporting foreclosures had been completed without signers' knowing the facts, and documents had been notarized without being properly witnessed. Getting the documents properly completed and refiled will take three or four months at "up to a couple million dollars a month or so just in additional work," said Charlie Scharf, the bank's chief of retail services.
But in a meeting Thursday with analysts in Boston, Scharf insisted that the errors were procedural. He said that foreclosures were justified and had been preceded by extensive reviews, repeated attempts to contact borrowers and attempts to modify loans.
The average borrower losing a home has made "not one payment in 14 months," Scharf said. "You know, in Florida it's 22 months, and in New York it's 26 months."
Problems with so-called robo-signed foreclosure documents have caused several other big loan servicers, including Bank of America Corp., Wells Fargo & Co. and Ally Financial's GMAC Mortgage unit, to impose freezes or amend huge amounts of paperwork. The companies each say that underlying circumstances justify the home seizures and that they intend to proceed with foreclosures as they sort out procedural problems.
Chase described its foreclosure issues in a lengthy presentation to a meeting of bank analysts in Boston, which also included an update on demands by investors and loan buyers that it repurchase large numbers of loans it had sold or had bundled up to back mortgage securities.
Bank of America, also addressed the demands to buy back mortgages in its presentation at the Boston conference. It said holders of mortgage securities, including Newport Beach bond investing giant Pimco and the Federal Reserve Bank of New York, were pressuring it to foreclose on borrowers faster.
-- E. Scott Reckard