• 28
  • March

A recent analysis by Reuters suggests that the number of homeowners who were wrongly foreclosed upon by lenders may be much higher than what the U.S. Comptroller of the Currency John Walsh is saying. According to WestLaw News & Insight, Walsh testified before the Senate Banking Committee that the OCC had reviewed 14 banks and found that only a "small number" of homes were wrongfully foreclosed upon and sold.

Reuters did its own examination and found that the sample of foreclosures used by the OCC to paint a picture for the Senate Banking Committee of all foreclosure sales was troubling. The OCC looked at a sample of 2,800 foreclosures even though there were more than one million foreclosures in 2010.

Even if only a "small number" of the small sample were wrongful foreclosures, that would be equal to tens of thousands of wrongful foreclosures by banks overall, which the OCC has acknowledged. Also, the OCC included in their examination homes that were still in the process of being foreclosed upon and hadn't even been sold yet, so of course they wouldn't have been included in wrongful sale numbers yet.

Reuters' examination of foreclosures and interviews of foreclosure defense attorneys found that incomplete, fraudulent and wrongful foreclosures were widespread. In possibly thousands of cases, lenders created fraudulent mortgage assignments in order to foreclose on a property.


Doubts raised on OCC foreclosure estimate (WestLaw News & Insight)