All 50 states move forward with foreclosure probe - MSNewsNow.com - Jackson, MS

All 50 states move forward with foreclosure probe

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By Ashley Conroy

JACKSON, MS (WLBT) - Since 2007, 2.5 million homes nationwide have been foreclosed according to the web site Realty Trac.

The National Association of Attorneys General released a letter on Wednesday stating that all 50 states are filing an investigation into foreclosure documents that appear to have defects.

"Some representatives from some companies admitted in testimony that they weren't actually reading the documents," said Attorney General Jim Hood.

Because of the inquiry of foreclosures during the housing bubble, states are alleging that major corporations such as Bank of America and JP Morgan Chase hired "unqualified" employees to handle important foreclosure documents.

General Hood says there have been cases of companies saying all affidavits were legitimate and that homeowners knew the terms in which they were being foreclosed.

"Number one we're asking them, what have you done thus far?" Hood continued, "What are you doing to look and make sure that you don't have people to just sign away things that they don't know."

In Mississippi, Realty Trac sites more than 3,000 home foreclosures. Some mortgage experts say to some degree, foreclosures have helped the economy.

"I think you'll find out that a lot competition right now in the real estate market is buying foreclosures whether you be at owner occupancy or an investor and it does help the economy," Bo Smith from Cornerstone Home Lending.

Century 21 Realtor Justin Wright says if the government pursues this measure of checking every "questionable" foreclosure, it could create more issues down the road.

"Consumers lose confidence in buying a foreclosure, but foreclosures will be taken off the market and there will be out of jobs by the thousands," Wright said.

However, Hood says improperly foreclosing on a home creates problems for those trying to buy that house.

"It's creating problems out there for people who are trying to buy these distressed properties." Hood continued, "With as much trouble as we've already had with our real estate market certainly we don't need that instability to come into play."

Meantime, Hood says their office has received one formal complaint from a Mississippian that mimics this foreclosure probe.

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