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Banking Department Orders Servicers to Suspend Foreclosures in New York State

NationalMortgageProfessional.com
Oct 13, 2010

The New York State Banking Department has called on mortgage loan servicers to expeditiously address concerns that have arisen about faulty affidavits in foreclosure proceedings. In letters sent to more than 20 mortgage servicers registered to do business in New York State, the Department required that these companies conduct internal reviews of their foreclosure practices and suspend foreclosure actions until a thorough analysis has been completed. The servicers were also asked to respond to the Banking Department on the following issues: ►The steps the servicer is taking or has taken to review the foreclosure process in New York; ►The results of the review, including a description of the process for verifying affidavits; the corrective action, if any, the servicer has taken or intends to take in response to the review; ►The measures taken to ensure that affidavits filed in New York foreclosure actions are executed in compliance with New York law; and ►The status of pending foreclosure actions in New York and measures taken to suspend such actions pending review. The New York State Banking Department joins 47 state attorneys general and 37 banking and mortgage regulators as part of a multi-state group that is investigating the foreclosure practices of mortgages servicers throughout the country. The Department serves on the Executive Committee of the Multi-State Group. “At a time when we need to be doing everything that we can to avoid preventable foreclosures and keep families in their homes, it is incredibly irresponsible that some servicers are not doing the bare minimum of following existing laws and properly verifying foreclosure documents,” said Richard H. Neiman, Superintendent of Banks for New York State. A copy of the letter sent to servicers is available here. A copy of the joint statement issued by the Multi-State Group is available here. For more information, visit www.banking.state.ny.us.
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