JPMorgan Chase halted forclosure proceedings on 50,000 properties amid allegations that the company has not been complying with state laws governing the foreclosure process. Bank of America and GMAC Mortgage LLC have also stoppped foreclosures and evictions in 23 states. The allegations are that employees at these companies have been signing-off on foreclosure proceedings without reviewing the documentation to support such action.
In certain states lenders can foreclose on properties fairly easily. But in Florida a lengthy preocess is required and some of the banks have allegedly not been observing the laws requiring them to verify loan information, inlcuding who owns the loan.
Ultimately this will simply slow down the already sluggish foreclose process. It does not mean that foreclosures that were legal are no longer going to take place, it means that the banks will have to start doing their homework and obeying the laws before they can foreclose. So if a property onwer has stopped paying their mortgage, the foreclosure will happen, it will simply take longer.
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