Banks Draw Scrutiny From Feds and Chicago-Area Sheriff
A sheriff in Chicago says he’ll halt evictions by three lenders until they submit affidavits confirming that the paperwork was done properly.
Cook County Sheriff Tom Dart said his foreclosure moratorium applies to Bank of America, J.P Morgan Chase and GMAC/Ally Financial, according to the Associated Press, Bloomberg and the Chicago Tribune.
Dart’s announcement was made as banks and financial firms are facing a federal investigation into whether fraudulent documents were used in foreclosures, the Washington Post reports. The probe investigates two questions. Did lenders mislead federal housing agencies that insure home loans, violating laws that make it a crime to lie to the federal government? And did lenders file false documents through the mail and computer networks, a violation of mail and wire fraud laws?
The Post story does not name the banks under investigation.
The Securities and Exchange Commission has also launched a probe, according to the Post and the Wall Street Journal (sub. req.). Previously, 50 state attorneys general announced that they were also investigating mishandled documents.
Dart, considered a contender for Chicago mayor, explained his actions in a press conference. “This is so outrageous and these poor families are being put through this day in and day out by people that don’t do their jobs,” he said. He imposed a similar moratorium two years ago that was lifted after new procedures were put in place to protect renters in foreclosures, the Tribune says.
