New Fraud Accusations Rattle Mortgage-Servicers

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After nearly 30 months of relentless turmoil in the national home mortgage industry, allegations of fraud within the mortgage-servicing industry are prompting as many as 40 state attorneys general to conduct investigations into financial institutions’ foreclosure practices.

According to the Wall Street Journal, the move comes on the heels of Bank of America’s decision to temporarily halt all foreclosure proceedings until it has a chance to review its internal procedures, including controversial practices such as the routine use of robo-signers- individuals hired to sign large volumes of documents without proper review or oversight. Banks claim that the issue is simply a technical matter, but others contend that the practice prevents homeowners the opportunity to renegotiate the terms of their mortgage and stay in their homes.

The Wall Street Journal

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