All the news of flawed, perhaps fraudulent, foreclosure paperwork has many – both inside and outside the industry – worried that housing’s feeble recovery could quickly derail.
A number of large lenders have frozen foreclosure actions and REO sales in certain states – one’s suspension extends nationwide – while they review individual cases.
Most every servicer has volunteered or been ordered by regulators to examine their own foreclosure procedures for potential deficiencies, but there are several major names – Wells Fargo, Citigroup, and PHH Mortgage – that are standing by initial claims that their foreclosure affidavits are legitimate.
Wells Fargo said Tuesday that it has begun taking a closer look at pending foreclosures, but the bank maintains confidence that its servicing practices are in compliance with applicable laws and regulations.
“We are confirming that Wells Fargo has no plans to initiate a foreclosure moratorium,” a company spokesperson said in a statement issued to DSNews.com. “Our affidavit procedures and daily auditing demonstrate that our foreclosure affidavits are accurate. As always, as a standard business practice, we continually review and reinforce our policies and procedures. This includes conducting additional reviews before loans go to foreclosure sale. If we find an error or if an improvement is needed, we take action. We are satisfied that our foreclosure affidavit process is sound.”
The Financial Times reported Thursday that while Wells has managed to distance itself from the paperwork debacle, the publication has uncovered a March court
deposition by one of the bank’s loan documentation officers. FT says Xee Moua, while working for Wells Fargo, claims to have signed off on as many as 500 foreclosures a day without verifying or even looking at the content of the files.
Moua testified that she pushed the foreclosures through even though she had no “personal knowledge of the facts regarding the sums of money which are due and owing to Wells Fargo,” according to FT.
In response, a Wells spokesperson told DSNews.com, “In our affidavit process, the person signing the affidavit is responsible for reviewing the information. We do not have a system in place where one person signs the affidavits while others do the actual reviews. As we have said previously when we find team members who do not follow procedure, we take corrective action. Until this case is resolved, we should keep in mind that a deposition does not suggest a wrongful foreclosure.”
The company representative stressed again that Wells Fargo’s records show its foreclosure affidavits are accurate.
Citigroup said in a statement that its foreclosure processes are “monitored to make certain that staffing is adequate to review the affidavits properly,” and that it sees no signs if improper activity that would warrant a foreclosure suspension.
PHH Corporation’s president and CEO Jerry Selitto said his organization “is actively cooperating with its regulators…and has completed a comprehensive review of its foreclosure procedures. Based on this review, PHH Mortgage has not halted foreclosures in any states and has no plans to initiate a foreclosure moratorium.”
On Wednesday, the regulator of Fannie Mae and Freddie Mac issued a directive to the GSEs’ servicers outlining steps they should take to identify and correct potential deficiencies in foreclosure paperwork, but the agency is urging servicers to continue with foreclosure actions where they can.
Edward DeMarco, acting director of the Federal Housing Finance Agency, said, “In the absence of identified process problems, foreclosures on mortgages for which the borrower has stopped payment, and for which foreclosure alternatives have been unsuccessful, should proceed without delay.”
article from dsnews.com