JPMorgan Chase warns attorneys of possible foreclosure robo-signers
JPMorgan Chase & Co. (JPM) last night alerted attorneys that employees in its foreclosure operations unit may have signed affidavits in foreclosure cases without personally reviewing the documents, the same issue that has recently plagued Ally Financial, according to a memo obtained by HousingWire. According to the memo, Chase has begun to re-examine documents it has filed in current foreclosure proceedings to verify the documents were reviewed as required by the courts. Thomas Kelly, a spokesman for the bank, confirmed information contained in the memo. "It has come to our attention that in some cases employees in our mortgage foreclosure operations may have signed affidavits about loan documents on the basis of file reviews done by other personnel - without the signer personally having reviewed those loan files," Kelly said. Last week, Ally Financial, formerly GMAC Mortgage, admitted employees signed foreclosure affidavits in 23 states without knowledge of the documents or a notary present, a process known as "robo-signing." As a result of its recent foreclosure problems, Ally/GMAC is facing a possible downgrade to its servicer rating and billions of dollars in affected residential mortgage-backed securities, as well as investigations from several attorneys general offices. JPMorgan Chase was the third largest residential mortgage servicer in the U.S. for 2009. It serviced $1.3 trillion in mortgages, behind only Bank of America (BAC) and Wells Fargo (WFC). In the memo, Chase says it believes the factual information given in the affidavits are accurate and not affected by whether or not the signer knew the details. The bank is engaged in independent outside counsel to review the preparation of its affidavits to make sure it satisfies all court standards. Chase is requesting that the courts not enter judgments on pending foreclosure cases until it completes the review in the next few weeks. When the initial news on the GMAC Mortgage problems broke, other large servicers spurred into action. For example, Mark Rodgers, a spokesman for Citigroup, Inc. (C), said the bank trains its employees on the proper execution of foreclosure affidavits. "This training stresses that personal knowledge and understanding of the affidavit is needed prior to execution and that the affidavit must be signed in front of the notary. In addition, our compliance group reviews files to make certain that our employees comply with the training," Rodgers said. Officials at Bank of America and Wells Fargo did not immediately respond to requests regarding their signing procedures for affidavits during a foreclosure. Write to Jon Prior.