Banks Insult to Justice System

By Mike Colpitts

Ohio’s hard talking attorney general says that banks and mortgage servicing companies simply choosing to re-file affidavits in order to straighten out their flawed paperwork on foreclosures is an “insult to the justice system.”

“The big mortgage servicers and financial firms continue to demonstrate their belief that they do not need to play by the same rules as everyone else who uses our court system,” said Attorney General Richard Cordray. Ohio’s chief law enforcement prosecutor said that banks like Wells Fargo & Co., which re-filed 55,000 foreclosure lawsuits in Ohio as a result of flawed filings the mortgage lender found is improper.

Ohio' Attorney Richard Cordray

The tough talking prosecutor is mounting an effort to get mortgage companies and banks to more aggressively modify mortgages with homeowners at risk of losing their homes to foreclosure instead of repossessing properties at record levels.

“The suggestion by Wells Fargo and its colleagues at several other national firms that they can cure fraudulent testimony by simply re-filing new affidavits and continuing to proceed toward foreclosures shows they do not recognize the seriousness of the problem they have created,” said Cordray. “There is no simple ‘do-over’ for false testimony that will be likely to avoid sanctions and penalties imposed by the courts.

“Their brazen efforts to minimize their financial exposure by sweeping these problems under the rug are an insult to the justice system in this country. These disclosures by Wells Fargo will now become the focus for a new prong of our on-going investigation.”

Wells Fargo - San Francisco

Cordray has become one of the leading voices in the 50-state investigation into the foreclosure crisis by all 50 state attorney generals. The top state prosecutors are looking into mortgage company and banking practices in foreclosures as a result of a series of witnesses, most of who are bank employees testifying under oath that they improperly miss-handled legal foreclosure filings.

Taking a hard-line approach with lenders and bank servicing companies, Cordray filed a lawsuit against GMAC for issuing false affidavits in many Ohio foreclosure cases in October. Ohio was the first state in the nation to file a lawsuit against a loan servicer for violating consumer laws. Since then, two other cases have been filed in addition to the case against GMAC.