Senator Robert Menendez, D-N.J., on Tuesday called for a nationwide moratorium on foreclosures after several large banks last week revealed widespread irregularities in legal procedures governing home repossessions.
Mendendez echoed the AFL-CIO. Last Friday the labor federation called for other banks to follow the example of JPMorgan Chase, which temporarily suspended foreclosures in response to revelations of the scale of the crisis.
Mendedez said, “It is simply inexcusable that proper oversight proceedings were not in place, especially when dealing with matters as monumental as the seizure of a family’s home.” He continued, “”At least one credit rating agency, Fitch, states that it believes this problem is widespread among banks and servicers, which raises the question of whether other banks should impose a moratorium until this lack of oversight is corrected.” The New Jersey Democrat heads the Senate Housing Committee.
In late September at an Atlanta conference on the crisis, AFL-CIO Executive Vice President Arlene Holt Baker said, “Foreclosure is not an equal opportunity tragedy.” After the Chase announcement she remarked, “Millions of working families are on the precipice of losing their homes, and we must stop the avalanche of foreclosures if we are going to save our communities from further economic harm.”
The United Auto Workers union has joined the campaign, upping the ante by calling for withdrawal of hundreds of millions of dollars from Chase because of its refusal to put in place a moratorium in Michigan. Michigan has one of the highest unemployment rates in the country. Layoffs are the leading cause of foreclosures.
The auto workers are also putting pressure on Chase because of its ties to R.J. Reynolds, the tobacco company. The UAW said the union’s president, Bob King, who has just returned from a fact-finding tour of the North Carolina tobacco fields, is prepared to remove all of the UAW’s funds from the bank.
“Chase needs to help unemployed homeowners in Michigan and underpaid farm workers in the Carolinas,” King said. “The bank could make a huge difference by suspending foreclosures and pressuring R.J. Reynolds to do the right thing.”
Religious leaders in Michigan are also withdrawing funds.
Chase has halted foreclosure in 23 states involving 53,000 homes.
The problem stems from rushing through court proceedings in an effort to foreclose on as many homes as possible. Often times bank officers signed off on foreclosure forms without even reading them.
The New York Times reports: “The missteps stemmed from the affidavits the lenders file as they seek a quick or summary judgment in thousands of foreclosure cases. The affidavits state certain facts about the case, including the amount owed, which the signer indicates he has personal knowledge of. Without the affidavit, the lender would have to prove the facts at trial.”
On Friday, Bank of America joined the list, also halting foreclosure action in 23 states.
The bank actions come in the wake of attorney generals in several states filing legal action against the financiers.
In Ohio, USAtoday.com reports, “Secretary of State Jennifer Brunner says she has asked a federal prosecutor to review thousands of Ohio foreclosures handled by Chase Home Mortgage and Mortgage Electronic Registration Systems Inc.
In Delaware and Texas attorney generals have followed suit.
Over 2.8 million homes were foreclosed in 2009. The number is set to increase this year.
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