The Columbus Dispatch last Wednesday reported that a Cuyahoga County, Ohio foreclosure case could set a new precedent in the state which may, in turn, "hasten settlement between home lenders and the attorneys general of the 50 states, who are investigating allegations of fraud in foreclosure filings."
The case has created a showdown between GMAC and Ohio Attorney General Richard Cordray, who filed a friend-of-the-court brief in the case arguing that the Court should punish GMAC-- the fourth-largest U.S. mortgage lender-- for its conduct., the Dispatch article said. "Cordray is asking Judge Nancy Russo of Cuyahoga County Common Pleas Court not to let GMAC simply submit new documents to cure defects without consequences. He's taken the same stand against Wells Fargo, which has said it found defects in 55,000 foreclosures."
The Attorney General's website recalls that "After filing a lawsuit against GMAC for fraud earlier this month, Cordray demanded that the loan servicer withdraw all pending foreclosures in which questionable affidavits were used in Ohio. This foreclosure case, U.S. Bank National Association v. James W. Renfro, was one of a handful of cases in which GMAC willingly filed a motion to withdraw. However, on October 25, Judge Nancy Margaret Russo denied the motion and ordered GMAC to provide the court with “proof of integrity of all documents submitted” at a pretrial set for November 8. To inform the court of evidence of affidavit tampering, Cordray filed an amicus brief." ( Further discussion here )
After JPMorgan Chase & Co. and Ally Financial Inc.'s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures and Bank of America Corp. froze foreclosures nationwide, the attorney generals from all 50 on Oct. 13 announced a coordinated inquiry into whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. As part of its probe, the 50-state group established an executive committee of top legal officers from 12 states-- Arizona, California, Colorado, Connecticut, Florida, Illinois, Iowa, New York, North Carolina, Ohio, Texas, and Washington-- and a number of state banking regulators, including those from Arizona, Florida, Illinois, Indiana, Kentucky, Ohio, Nebraska, Maine, and Vermont. ( See Joint Statement ) A Bloomberg/Newsweek article, also earlier this week, said that, while the probe was on a “fast track”, a global settlement of that task force investigation is unlikely, and that it would most likely be one bank at a time.