Wells Fargo Home Mortgage will submit supplemental affidavits in about 55,000 pending foreclosures in 23 judicial foreclosure states, saying final reviews of the documents and some aspects of the notarization process did not adhere to company procedures.
Wells Fargo said it was acting "out of an abundance of caution," and that the issues identified were unrelated to quality of the customer and loan data.
Company officials said in a statement they don’t believe "that any of these instances led to foreclosures which should not have otherwise occurred," and the company does not plan to institute a moratorium on foreclosure sales. Wells Fargo hopes to complete the process of submitting supplemental affidavits by mid-November.
At least five other loan servicers — Bank of America, GMAC Mortgage, JP Morgan Chase, PNC Financial Services Group Inc. and Litton Loan Servicing — are reviewing foreclosure filings in 23 states where courts have jurisdiction over the foreclosure process, and some have voluntarily suspended or curtailed foreclosure proceedings in those states.
Bank of America and GMAC Mortgage expanded their reviews to non-judicial foreclosure states, and Bank of America had announced a temporary halt of foreclosure sales in all 50 states on Oct. 8.
Ten days later, Bank of America announced that it would begin resubmitting affidavits in 102,000 pending foreclosures in 23 judicial foreclosure states as of this week, which would allow it to resume foreclosure sales in those states.
Ohio Attorney General Richard Cordray, who this month filed suit against GMAC for allegedly issuing false affidavits in Ohio foreclosure cases, characterized loan servicers’ refiling of affidavits as "brazen efforts to minimize their financial exposure by sweeping these problems under the rug."
"The suggestion by Wells Fargo and its colleagues at several other national firms that they can cure fraudulent testimony by simply refiling new affidavits and continuing to proceed toward foreclosures shows they do not recognize the seriousness of the problem they have created," Cordray said in a statement.
"There is no simple ‘do-over’ for false testimony that will be likely to avoid sanctions and penalties imposed by the courts."
Cordray said Wells Fargo’s announcement will become the focus for a new prong of the state’s ongoing investigation into loan servicers’ foreclosure practices.