Economy Watch: Attorneys General Seek Foreclosure-Signing Investigation

The attorneys general are inquiring about improper submission of documentation.

October 14, 2010
By Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user chrisdlugosz

As of Wednesday, 50 of the 50 states attorneys general, along with some state bank and mortgage regulators, have joined the new Mortgage Foreclosure Multistate Group (Alabama’s attorney general was the last to join, on Wednesday afternoon). The group issued a joint statement on Wednesday detailing its reasons for being and what it plans to do first.

“Our multistate group has begun inquiring whether or not individual mortgage servicers have improperly submitted affidavits or other documents in support of foreclosures in our states,” the statement noted. “Through this process, the states will attempt to speak with one voice to the greatest extent possible. The facts uncovered in our review will dictate the scope of our inquiry.”

Mere paperwork glitches or systemic fraud or a byzantine amalgamation of both? The plot thickens.

CRE Pros Feeling More Optimistic About ’11 Than ’10

A survey of about 900 commercial real estate professionals by the Urban Land Institute and PriceWaterhouseCoopers L.L.P. released on Wednesday noted that 63 percent of respondents believe that maturing CRE will start to be modified in greater numbers in the near future. “Extend and pretend” may be giving way to “extend and amend,” in other words.

Optimism is creeping back into CRE thinking (and how long could that stay surpressed?), according to the survey. Some 56 percent of respondents are expecting at least “moderately good” profits next year. Only 35 percent felt that way in 2009 about this year.

The optimism is not, however, an irrational sort. Expectations have been trimmed like sails in a strong wind. “In the Era of Less, modest, boring income returns should become more expected, accepted and necessarily embraced in more markets,” the survey’s authors wrote.

Mortgage Case Against Countrywide Dismissed

In a ruling made public on Wednesday, New York State Supreme Court Justice Barbara Kapnick dismissed a lawsuit against Bank of America’s Countrywide unit brought by two investment funds. The plaintiffs were suing over a deal Countrywide made with 11 state attorneys general two years ago to modify about $8.4 billion worth of mortgages.

The suit sought to force Bank of America to buy back the mortgages it had sold to the investors, at full price. The judge said no, mainly because the plaintiffs hadn’t met the conditions required under the pooling and service agreements to bring a suit, especially the one about getting the support of at least a quarter of the mortgage bond investors before proceeding.

Wall Street had a positive day on Wednesday, including (interestingly enough) bank stocks. The Dow Jones Industrial Average gained 75.68 points, or 0.69 percent, while the S&P 500 was up 0.71 percent and the Nasdaq advanced 0.96 percent.