JP Morgan Chase has suspended the legal proceedings around 50,000 foreclosures because the documents involved may have been processed incorrectly.
Overwhelmed by the housing crisis, mortgage companies hired employees to process foreclosure documents as quickly as possible, without ever reading, reviewing or verifying the cases before them. The process is called "robo-signing," and it accounts for an alarming number of seized homes. By some reports, these hired clerks were approving ten thousand foreclosures a month—some of them in error.
JP Morgan Chase's move comes just one week after GMAC Mortgage halted foreclosures in twenty three states for the same reason. Thousands upon thousands of Americans have lost their homes already, and we’re asking housing expert Guy Cecala, Publisher of Inside Mortgage Finance, what’s next?