JPMorgan became the second major lender after GMAC/Ally Bank to halt pending foreclosures, halting proceedings on 56,000 homes. This follows revelations that “robo-signer” “foreclosure mills” were filing paperwork that would be gracious to call “sloppy,” at the rate of 10,000 a day.
Chase Mortgage said that it would systematically review the files and correct the errors, which it qualified as technical in nature.
“The GMAC announcement was the mushroom cloud,” a Florida defense lawyer told the New York Times. “The fallout will burn through the entire mortgage servicing industry.”
The new scrutiny is expected to slow an already sluggardly foreclosure process, and homeowners fighting foreclosure will seize on the “dirty documents” to save their homes.
JPMorgan Suspending Foreclosures [New York Times]