Local foreclosures up again
10/20/2010Local foreclosures haven't slowed even as the state's top lawyer expands his probe of fraudulent bank foreclosure practices.
Meanwhile, big lenders nationally, following their own investigations, said Tuesday they have resumed taking delinquent properties, a few weeks after they had halted the practice.
The involvement of attorneys general across the country, claiming in many cases that banks processed massive numbers of foreclosures without appropriately verifying the paperwork, has clouded foreclosures nationwide.
But what is clear in Lucas County is the number of foreclosures has begun to climb again, after seven months of decline. And hundreds more properties await scheduling for a sheriff's sale, the last step in the process.
The county had 355 new foreclosure cases filed in September, up 46 over the same month a year ago. So far in October, there have been 186 new cases, up from 152 for the same period a year ago, said Clerk of Courts Bernie Quilter. For the year, however, the number of foreclosure cases is still down 7 percent, or 230 cases, to 3,165.
“We were starting to see all these months of negative numbers, and now in September and October, we're starting to see them go back up again, Mr. Quilter said.
“These are little numbers right now, but they're really coming back up,” he said.
Foreclosure actions have become so pervasive in metro Toledo that they represent a majority — 51 percent — of all civil cases filed in Lucas County Common Pleas Court this year. The percentage is even higher in Wood County, clerk Cindy Hofner said, with 613 foreclosure actions filed this year among 1,080 civil cases overall.
The cases haven't been stopped locally, but Ohio Attorney General Richard Cordray has a pending request in Lucas County Common Pleas Court for a preliminary injunction against GMAC Mortgage to stop foreclosure proceedings. No hearing has been set on the request.
The attorney general filed suit Oct. 6 alleging that the mortgage giant had routinely filed fraudulent affidavits in foreclosure cases because the person signing the document claimed to have “personal knowledge” of the delinquent loan when, in fact, he or she didn't.
The practice, termed “robo-signing,” is part of a widening investigation by the federal government and the attorneys general of all 50 states into the banking practices surrounding the nation's ongoing foreclosure crisis.
“The notion that these firms are telling us that they committed fraud, but that it was an oversight, is not believable,” Mr. Cordray told The Blade Tuesday. “I also think it reflects that they are still not taking this seriously.”
He is on the executive committee of attorneys general guiding the 50-state probe of mortgage company practices. “These banks are pretty much daring the courts to stop them.”
GMAC and Bank of America each said Tuesday there were resuming their foreclosure actions, which they had suspended in the past few weeks because of the concerns about the alleged fraudulent activities.
The White House warned banks Tuesday it would hold them accountable for any illegal mortgage practices. It said that the Federal Housing Administration and Financial Fraud Enforcement Task Force have undertaken their own regulatory and enforcement investigation into the foreclosure process.
Ending their unilateral moratoriums on housing foreclosures will not resolve the challenges banks face from the foreclosure mess. They could still be hit with fines and lawsuits, and may be forced to repurchase faulty loans.
In the Lucas County case, the court has been asked to impose fines of up to $25,000 per violation if it found the bank and mortgage processors had filed false affidavits, representing hundreds of millions of dollars in potential liability.
Chief Executive Brian Moynihan of Bank of America said his firm's initial probe of its foreclosure filings has not found the problems cited by the attorneys general.
Contact Larry P. Vellequette at: lvellequette@theblade.com or 419-724-6091.