SHAHEEN URGES MORTGAGE LENDERS TO SUSPEND FORECLOSURES IN ALL STATES

(Washington, D.C.) - U.S. Senators Jeanne Shaheen (D-NH), Al Franken (D-MN), Sheldon Whitehouse (D-RI), and Carl Levin (D-MI) today called on major mortgage lenders to suspend foreclosures in all states, not just those that require a court process, until the lenders fix systemic problems with their foreclosure procedures. The nation's major mortgage lenders - Bank of America, JP Morgan Chase, and Ally Financial - recently decided to suspend foreclosures in states with court-ordered foreclosures, but not other states.

"We have heard from countless constituents that your processes for handling foreclosures are simply broken," said the Senators in the letter.  "It is clear to us that the systemic mishandling of foreclosures by your companies is not limited to states that require court involvement.

"These practices not only harm these homeowners, but also threaten our economic recovery," the letter stated.  "Unnecessary foreclosures hurt other homeowners and our economy by further distressing home prices."

The senators, who represent states that do not require lenders to go to court to foreclose, said that problems with the foreclosure processes of major lenders were systemic and not limited to the judicial foreclosure states.

"It is only fair that you provide homeowners in all 50 states the same accommodation while you attempt to fix the systemic problems with your handling of foreclosures," the Senators said.

Today, Bank of America announced that it would suspend foreclosures in all 50 states.  The letter was sent to the other two major servicers, Ally Financial and JP Morgan Chase, asking them to do the same.

In August, there were 408 foreclosure deeds recorded in New Hampshire, which was a record high for the month, according to the New Hampshire Housing Finance Authority.

The full text of the letter to JP Morgan Chase is below:

October 8, 2010

Mr. James Dimon
JPMorgan Chase
Chairman and Chief Executive Officer
270 Park Avenue
New York, NY 10017-2070

Dear Mr. Dimon:

As elected representatives of states that do not require court proceedings for foreclosures, we write to urge you to extend your suspension of foreclosures to all 50 states until you have addressed the deep, systemic problems with your foreclosure procedures that have resulted in thousands of working families unnecessarily losing their homes.

You recently announced that you would suspend or review foreclosures in the 23 judicial foreclosure states as a result of revelations that your companies regularly misrepresented information to courts.  That was the right decision.  However, it is clear to us that the systemic mishandling of foreclosures by your companies is not limited to states that require court involvement.   Borrowers in all states may affirmatively raise claims in court during the foreclosure process. 

We have heard from countless constituents that your processes for handling foreclosures are simply broken.  Good faith efforts to arrange reasonable loan modifications or execute short sales are routinely lost in a web of paperwork or fall victim to bureaucratic inaction.  In many cases, homeowners have felt misled and that your companies operated in bad faith. 

These practices not only harm these homeowners, but also threaten our economic recovery.  Unnecessary foreclosures hurt other homeowners and our economy by further distressing home prices.   To fully emerge from this recession, we all need to do more to help homeowners who have a reasonable chance of paying their mortgage.

These are nationwide problems that require nationwide solutions.  It is only fair that you provide homeowners in all 50 states the same accommodation while you attempt to fix the systemic problems with your handling of foreclosures.  Until you are able to do so, we call on you to immediately suspend your foreclosure proceedings across the country.

Sincerely,

U.S. Senators Jeanne Shaheen (D-NH), Al Franken (D-MN), Sheldon Whitehouse (D-RI), and Carl Levin (D-MI)