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Franken, Menendez Call for GAO Investigation into Mortgage Fraud

Wednesday, October 6, 2010

Today, U.S. Sens. Al Franken (D-Minn.) and Robert Menendez (D-N.J.) pressed the Government Accountability Office (GAO) to investigate whether Ally Financial, JP Morgan Chase, Bank of America and other mortgage servicing companies and banks routinely filed false affidavits, triggering thousands of illegal foreclosures on unwitting homeowners in Minnesota and across the country.

The senators also asked the GAO to investigate the role of government entities involved in overseeing mortgage servicing, identify any regulatory problems, and give recommendations on whether regulatory agencies should be given additional authority to remedy any problems. Full text of the letter can be read here.

"We are writing to request that the GAO conduct an investigation into the reports of misconduct by Ally Financial (formerly GMAC Mortgage), JPMorgan Chase, Bank of America and all other mortgage servicing companies and affiliated banks," the letter reads. "We are concerned that shortcomings in policies and procedures at these companies may have resulted in routine filing of false affidavits in foreclosure proceedings. Such actions may have resulted in numerous illegal foreclosures nationwide."

Last week, Sen. Franken asked six federal agencies calling for an extensive federal investigation of possible misconduct by Ally Financial following allegations that homeowners were wrongly foreclosed upon (which can be read here). Since earlier this year, he has also been pushing for the creation of the Office of the Homeowner Advocate within the Home Affordable Modification Program (HAMP), which would focus on assisting homeowners who believe their mortgage servicer is breaking the rules.

 

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