Banks, AGs to square off in Senate over foreclosures
The Senate Banking Committee will hear testimony Tuesday from both sides of recent foreclosure problems at the major banks. Bank of America (BAC), JPMorgan Chase (JPM), Ally Financial (GJM) and other mortgage servicers suspended foreclosures in judicial states when employees signed affidavits without reviewing documentation or having a notary present. The banks, including Wells Fargo (WFC) which said it was taking a "precautionary measure," have begun refiling those affidavits. The delays have sparked a wave of homeowner lawsuits, a joint investigation from the 50 state attorneys general, 11 federal regulators and has put any signs of a housing recovery on hold. BofA will refile 102,000 affidavits. JPMorgan Chase said problems have affected 127,000 of its mortgage loans, and Wells said it is refiling 55,000 affidavits. Ally Financial said it has reviewed more than 9,500 files and will review another 15,500 if necessary. The Senate Banking Committee will hear testimony on the issue from Bank of America Home Loans President Barbara Desoer and JPMorgan Chase Home Lending CEO David Lowman. Speaking first will be Iowa AG Tom Miller, who is heading up the 50-state investigation. Diane Thompson, counsel for the National Consumer Law Center, and Adam Levitin, an associate professor of law at Georgetown University will also testify. Those listening in can expect Desoer and Lowman to elaborate on the amount of volume the banks are facing, and the others to demand action to sure up servicing operations. In the third-quarter earnings conference, BofA CEO Brian Moynihan told investors that the assessment would only take a "few weeks" to conclude, and in 80% of third quarter foreclosures, borrowers hadn't made a mortgage payment for more than a year. Write to Jon Prior.