U.S. REP. GABRIELLE GIFFORDS APPLAUDS HALT IN FORECLOSURES BY BANK OF AMERICA
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U.S. REP. GABRIELLE GIFFORDS APPLAUDS HALT IN FORECLOSURES BY BANK OF AMERICA

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Congresswoman urges all other mortgage services companies to take similar action until flaws are addressed

TUCSON, AZ – October 8, 2010 – (RealEstateRama) — U.S. Rep. Gabrielle Giffords welcomed a move today by Bank of America to halt all foreclosures nationwide as it addresses potential problems in foreclosure documents.

The congresswoman urged other lenders and loan servicers to do the same.

“Bank of America has acted responsibly by halting all foreclosures and stepping back to ensure that no one loses their home because of a clerical error,” Giffords said today. “But I will not be satisfied until every lender and mortgage servicer does the same thing to resolve rampant sloppiness in the rush to foreclose.”

Giffords last week called for an immediate three-month national moratorium on foreclosures so lenders and loan servicers can address extensive problems that have led to homeowners being wrongly removed from their homes.

Since then, a growing coalition of organizations and individuals have made similar calls. Among them are top congressional leaders.

USA Today reported this morning that concern is growing that mortgage lenders have been evicting homeowners using flawed court papers. State and federal officials have been ramping up pressure on the mortgage industry over worries about potential legal violations.

Last week, Bank of America said it would halt foreclosures in the 23 states in which foreclosure sales must be approved by a judge. Today, the bank expanded that action nationwide after evidence surfaced that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying information in them.

Giffords cited precisely that problem last week when she called for all foreclosures to be stopped. Since January 2009, Giffords’ office has been contacted by at least 600 Southern Arizonans who were facing the risk of foreclosure.

About 85 percent of the homeowners who contacted Giffords’ office were dealing with problems caused by lender delays in processing paperwork, lenders that had lost paperwork or lenders that had not responded to repeated requests for information.

“The problems we are seeing approach gross carelessness,” Giffords said last week. She cited the case of a family that had lived in their home for 12 years. They had a letter from their bank stating they were being reviewed for a loan modification but they also had a summons to appear in court to be evicted.

According to the latest figures, Arizona has the third-highest foreclosure rate in the country. One in every 165 homes in the state is in the foreclosure process. Only Nevada and Florida have higher foreclosure rates.

Also Friday, PNC Financial Services Group said it is halting most foreclosures and evictions in 23 states for a month so it can review whether documents it submitted to courts complied with state laws.

PNC becomes the fourth major U.S. lender to halt some foreclosures amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them. Ally Financial’s GMAC Mortgage unit and JPMorgan Chase & Co. have announced similar moves in the past two weeks.

Giffords noted that her office has worked to assist numerous homeowners who were treated unfairly. In one instance, a lender claimed to never have received a constituent’s signed loan modification agreement and mortgage payment.

“My office provided the lender with the delivery confirmation tracking number, the name of the employee who received the delivery and proof of the cancelled check,” the congresswoman said last week. “We had to prove to this lender that not only had they received the documents, but had also already deposited my constituent’s payment.”

One of the most appalling cases in which Giffords’ office got involved concerned a Gulf War veteran who was consistently two weeks late on his mortgage because he was undergoing chemotherapy. His attempts to work with his bank proved fruitless, his home was foreclosed and he was served with eviction papers.

“Only after my office stepped in did the bank agree to allow this veteran to keep his home,” Giffords said. “Human tragedies like this should not be happening.”

Giffords also is cosponsoring legislation aimed at reducing mortgages to current low market rates for up to 30 million homes held or backed by Fannie Mae and Freddie Mac.

The Housing Opportunity and Mortgage Equity (HOME) Act was introduced in the House last week by Rep. Dennis Cardoza, a California Democrat. The bill would refinance all mortgages owned or guaranteed by the government sponsored enterprises Fannie Mae and Freddie Mac at current historically-low market rates, providing millions of Americans with more affordable mortgages.

Contact
C.J. Karamargin
Communications Director
U.S. Rep. Gabrielle Giffords
Arizona’s 8th Congressional District
(520) 881-3588 or (520) 909-8482

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Gabrielle Giffords is a member of the United States House of Representatives for Arizona's 8th congressional district.

A Democrat from Tucson, Arizona, she is the youngest woman ever to be elected to the Arizona Senate, where she served from 2003 to 2005, and the only member of the U.S. Congress whose spouse is an active duty member of the US military.[

Contact:

C.J. Karamargin
Communications Director
U.S. Rep. Gabrielle Giffords
Arizona’s 8th Congressional District

(520) 881-3588 or (520) 909-8482

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