Attorney General’s office joins multistate review of bank foreclosure practices

Wilmington – Attorney General Beau Biden announced that his office is participating in a coordinated
national effort by state Attorneys General and state mortgage regulators to investigate the foreclosure
review and verification procedures used by the mortgage servicing industry. Officials from 50 states
have joined together to review allegations that affidavits or other documents used in foreclosure
proceedings were improperly submitted as well as other issues regarding irregularities or abuses by
mortgage lenders and loan servicers. Last week, Biden urged Bank of America, JP Morgan Chase, and
Ally Financial to suspend foreclosure proceedings while they review their foreclosure procedures and
announced that his office is reviewing the banks’ foreclosure practices. Bank of America responded
two days later by halting foreclosure proceedings in all 50 states.

“Democratic and Republican Attorneys General from all over the country share the same
concern: making sure banks have accurate documentation before foreclosing on families,” Biden said.
“Just as homeowners have an obligation to pay their mortgages, lenders also have an obligation to
follow the rules when they foreclose on a homeowner’s property. We’re working as quickly as
possible to ensure that banks follow our laws and regulations so that Delawareans facing foreclosure
benefit from the legal protections they deserve.”

The Mortgage Foreclosure Multistate Group, comprised of 50 state attorneys general and state
banking and mortgage regulators in 30 states, will look into whether individual mortgage servicers
have improperly submitted documents in support of foreclosures. Its initial objectives include:
• Put an immediate stop to improper mortgage foreclosure practices.
• Review past and present practices by mortgage servicers subject to the inquiry.
• Evaluate potential remedies for past practices and to deter future improper practices.
• Establish a mechanism for more effective independent monitoring of future mortgage
foreclosure practices.

The multistate group will contact a comprehensive list of individual mortgage servicers and
will consult with federal regulators and agencies, including the Mortgage Fraud Working Group of the
Financial Fraud Enforcement Task Force (FFETF), which was created in 2009.

The Mortgage Foreclosure Multistate Group released the following joint statement announcing
its review:

“It has recently come to light that a number of mortgage loan servicers have submitted
affidavits or signed other documents in support of either a judicial or non-judicial foreclosure that
appear to have procedural defects. In particular, it appears affidavits and other documents have been
signed by persons who did not have personal knowledge of the facts asserted in the documents. In
addition, it appears that many affidavits were signed outside of the presence of a notary public,
contrary to state law. This process of signing documents without confirming their accuracy has come
to be known as “robo-signing.” We believe such a process may constitute a deceptive act and/or an
unfair practice or otherwise violate state laws.

In order to handle this issue in the most efficient and consistent manner possible, the states
have formed a bi-partisan multistate group to address issues common to a large number of states. The
group is comprised of both state Attorneys General and the state bank and mortgage regulators. All 50
state Attorneys General have joined this coordinated multistate effort. State bank and mortgage
regulators are participating both individually and through their Multistate Mortgage Committee, which
represents mortgage regulators from all 50 states. Through this process, the states will attempt to
speak with one voice to the greatest extent possible.

Our multistate group has begun inquiring whether or not individual mortgage servicers have
improperly submitted affidavits or other documents in support of a foreclosure in our states. The facts
uncovered in our review will dictate the scope of our inquiry. The Executive Committee is comprised
of the following Attorneys General Offices: Arizona, California, Colorado, Connecticut, Florida,
Illinois, Iowa, North Carolina, Ohio, Texas, and Washington; and the following state banking
regulators: the Maryland Office of the Commissioner of Financial Regulation and the New York State
Banking Department.”
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