Home > Foreclosure, Mortgage Scams > First major state lawsuit filed over ‘robo-signing’

First major state lawsuit filed over ‘robo-signing’

Massachusetts has filed the first major lawsuit over “robo-signing” foreclosure processing.

Massachusetts Attorney General Martha Coakley filed suit against Bank of America, JP Morgan Chase, Citi, Ally Financial and Wells Fargo, as well as the MERS corp (Mortgage Electronic Registration System, Inc.), citing “unlawful and illegal foreclosures against homeowners in Massachusetts.”

USA Today reports that the Attorney General alleges these five entities “engaged in unfair and deceptive trade practices in violation of Massachusetts’ law by: Pervasive use of fraudulent documentation in the foreclosure process, including so-called “robo-signing”, foreclosing without holding the actual mortgage, corrupting Massachusetts land recording system through the use of MERS, and failing to uphold loan modification promises to Massachusetts homeowners.”

Through this lawsuit, she hopes to force accountability upon the banks and to provide homeowners with “real and enforceable relief…for the harm that the misconduct has caused.”

Like California, Massachusetts is a non-judicial state in terms of foreclosures unlike many other states that require the bank to go to court and get a judgment before they can file for a foreclosure. Many homeowners don’t realize that they have rights and options can get the advice of an attorney before agreeing to any foreclosure settlement.  The banks, aware that most homeowners do not seek legal advice fully take advantage of this predicament. This lawsuit will seek to work in favor of what is best for the people of Massachusetts, giving homeowners a stronger voice and access to their rights.

While Attorney General Coakley has joined others in a state and federal government negotiation to reach a settlement that could cost those banks $20 billion, Coakley, criticized the banks stating, “I believe that the banks have failed to offer meaningful and enforceable relief to homeowners for their deceptive practices.”

This new lawsuit could be just the beginning of a slew of state suits against the banks if no multi-state agreement is reached.

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