Review of Foreclosure Home Auction Processing Revealed Mistakes- By: John Cutts
Allegations that lenders in the U.S. are sending properties to foreclosure home auction using faulty documents prompted several major lenders to conduct a review of their procedures and put a temporary hold on the sale of foreclosed properties. Recently, one of the major lenders that conducted a review but did not halt foreclosures admitted that mistakes were indeed committed in some cases.
According to Wells Fargo, errors were found in 55,000 cases of foreclosures handled by the bank. The company also announced that it is planning to refile the paperwork for the foreclosed properties before the end of November 2010. Wells Fargo described the errors as technical and also stated that it is not planning to stop procedures on properties facing the possibility of ending in foreclosure and repossessed house listings.
Despite nationwide criticisms against lenders that can be found in foreclosure magazine, newspapers and other mass media forms, the bank stated that its decision to continue processing foreclosed properties is based on the fact that they had not found any evidence showing that foreclosures were caused by the document errors.
Wells Fargo did not join other lenders, such as Bank of America and GMAC Mortgage, in suspending the sale of properties under foreclosure home auction following allegations that faulty documents are being used in processing distressed properties. Wells Fargo officials have announced that they are confident that the bank's foreclosure procedures are sound and accurate.
The steps involved in the process of foreclosure homes were put into question after a number of employees working for major lenders in the U.S. admitted that they sign documents without verifying first the facts and data contained in them. At Wells Fargo, an employee signed a deposition last March revealing that she signed as many as 500 documents of foreclosures a day.
Another Wells Fargo employee also revealed in a deposition in May that he only verify the dates on around 150 documents that he signs every day, relying instead on his co-workers to make sure that the data included in the documents are correct. On the part of Bank of America, one of the lenders that halted the sales of properties under foreclosure home auction, they will be meeting with government officials who are investigating the faulty document issue within the next few days.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.