AUSTIN, Texas -- Texas Attorney General Greg Abbott asked
loan servicing companies on Monday to suspend all foreclosure
activities over concerns about the accuracy of foreclosure
documents.
In a letter sent to 27 companies that service mortgage loans in
Texas, Abbott's office demanded the immediate suspension of
foreclosures, selling foreclosed properties and evicting people
living in those properties.
The letter asks that companies obey the moratorium at least
through Oct. 15 -- the deadline Abbott established for companies to
identify any employees who participated in unlawful practices and
assure the state that the targeted companies are following Texas
laws.
The attorney general's office is investigating mortgage lenders
to determine the "full harm Texas homeowners have suffered,"
according to a letter signed by Paul D. Carmona, the chief of the
state consumer protection and public health division.
"We will be pushing forward with our investigation and
inquiry," attorney general spokesman Jerry Strickland said. "This
is in the interest of homeowners who are feeling the effects of
foreclosures."
Other states are taking similar action. Maryland Gov. Martin
O'Malley supports a 60-day moratorium on foreclosures there.
Delaware Attorney General Beau Biden is calling on mortgage banks
to suspend all pending foreclosures until their policies are
reviewed. And in Massachusetts, Attorney General Martha Coakley
said her office is investigating an "apparent failure of major
creditors to follow state foreclosure law."
The Texas request comes after several companies, including Bank
of America, suspended foreclosures following revelations of
"robosigning," a practice in which bank employees sign thousands
of foreclosure documents a month without verifying their accuracy
or even reading them. Some of the court documents have proven to
contain inaccurate information or improper notarizations or
signatures.
In his letter, Carmona described possible fraudulent practices
by lenders, including signing thousands of documents per months,
often without reading them; signing affidavits falsely claiming
personal knowledge of facts or falsely claiming the signing party
reviewed attached documents; and notarizing documents prior to
their signing or when the signer was not present.
