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Sorting Through Foreclosures Will Take Months, Lawyers: Texas AG

Foreclosure Sign
CNBC.com
Foreclosure Sign

Texas Attorney General Greg Abbott, who has called for a halt on foreclosures, told CNBC Tuesday that sorting through the problems caused by wrongful foreclosures could take months to unwind and require lots of legal work.

“I’m talking about foreclosures that were undertaken with inappropriate, inadequate or maybe illegal documentation,” said Abbott.

“It’s robo-signing as well as other inadequate documentation that could range from negligence all the way to perjury.”

He said financing companies could review their foreclosure processes likely by the end of October, making sure they’re handling the paperwork correctly.

Meanwhile, some of the country’s biggest banks and lenders have restarted foreclosing on homes.

Bank of America said on Monday it was partially lifting its foreclosure suspension, and GMAC Mortgage, one of the largest servicers of U.S. residential loans, followed suit, reported Reuters.

On Tuesday the White House warned banks that it would pursue them for any mortgage practices that violated the law, in effect putting pressure on banks that were lifting their foreclosure freeze.

Abbott is among the officials from 50 states and Washington, DC, who launched a joint investigation last week into allegations that mortgage companies mishandled documents and broke laws in foreclosing on hundreds of thousands of homeowners.