Tuesday, October 12, 2010

California might join probe of lenders that seized homes

There have been other settlements in the past.
The investigation, which is expected to be publicly announced Wednesday, is spearheaded by Iowa Atty. Gen. Tom Miller. Under his leadership, coalitions of states have won lending-abuse settlements of $484 million from Household International Inc. and $325 million from Ameriquest Mortgage Co.
 California uses a trust deed system, not a judicial foreclosure system.  However, there could be some issues.
Foreclosures don't normally go before judges in California. But it and other non-judicial foreclosure states could join the coalition of states because the investigation is expected to go beyond the affidavit issue to determine whether major loan servicers observed other state foreclosure laws.
In California, for example, servicers must attempt to confer with delinquent borrowers about alternatives such as loan modifications before they foreclose, and the lenders must sign statements attesting that they have done so. Brown called last week for lenders to voluntarily call off foreclosures in the state until it is determined that they are meeting those requirements.
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