Legal Ethics

JPMorgan Chase Freezes Foreclosures in 56,000 Cases; Will More Banks Follow Suit?

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Updated: After an article from Bloomberg over the weekend detailing document issues that could put thousands of mortgage foreclosure cases in doubt, JPMorgan Chase & Co. has slammed on the brakes.

The lender announced today that it has asked courts not to issue final judgments in 56,000 cases while it reviews documents to make sure they are accurate, the Political Economy blog of the Washington Post reports.

“Chase does not expect [to] find any factual problems and that customers have been harmed, but if we do find any cases we will take appropriate action,” a bank spokesman said.

The Associated Press reports that Tom Kelly also said the bank is confident that “appropriate personnel” prepared its affidavits in foreclosure cases.

The bank is also bringing in outside counsel to review its foreclosure processes, reports Reuters.

News of the Chase freeze follows word last week that GMAC Mortgage was calling a temporary halt to ongoing foreclosures in 23 states based on concerns about its affidavits. GMAC is owned by Ally Financial Inc.

“It would not surprise me if other banks now look at this issue,” attorney Frank Hirsch tells Reuters. He is a partner at Alston & Bird.

Related coverage: “Fla. AG Probe: Did 3 Law Firms Get 1,000s of Foreclosure Judgments By Possible Wrongdoing?” “GMAC Suspends Foreclosures in 23 States After Questions About Legal Paperwork” “Foreclosure System Is ‘Riddled with Faked Documents’” “‘Foreclosure Mill’ Law Firms Under Pressure from Lawmakers”

Last updated at 7:03 p.m. to link to subsequent post.

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