SAN FRANCISCO (Reuters) A probe of U.S. foreclosure practices in all 50 states will not fade away after the November 2 elections, Ohio Attorney General Richard Cordray said in an interview on Thursday.
Cordray, a Democrat, is one of the leaders of the states’ joint investigation into whether banks submitted faulty legal documents in foreclosure proceedings and is up for re-election next month. Some of his colleagues, like California Attorney General Jerry Brown, are also running for higher office.
But Cordray, who is also the only attorney general who has filed a lawsuit against a servicer, said politics had nothing to do with the decision to launch the probe.
“If financial institutions are trying to laugh this off ... by trying to dismiss the 50-state investigation as motivated by politics and going to somehow evaporate 10 days from now, then they are not addressing the seriousness of the situation,” he told Reuters.
Still, taking on the big banks on behalf of downtrodden homeowners may be good politics in a year when Cordray and his fellow Democrats are under siege. Republicans are widely expected to do well in congressional and state races.
“This is mom and apple pie, to side with homeowners and be sympathetic with them,” said Larry Sabato, director of the University of Virginia’s Center for Politics. “It’s one of the easiest calls in politics to make.”
The foreclosure documents fiasco, in which banks are accused of using “robo-signers” to sign hundreds of foreclosure documents a day, has reignited public anger with banks, blamed for helping cause the recent financial crisis and recession.
Earlier this month, Bank of America, temporarily stopped foreclosure processing while it examined whether documentation was properly done. Ohio was one of the states where it said it would resume foreclosures.
SEEKING BANKS’ COOPERATION
Cordray’s office is seeking a court order to bar Ally Financial’s GMAC unit from pursuing problematic foreclosures in Ohio.
He has also sought information from lenders including Citigroup Inc, JPMorgan Chase & Co, Wells Fargo & Co, and Bank of America..
On Thursday, Corday said other lenders are cooperating, but that his office hasn’t decided whether they will be added to the GMAC suit.
“We will size that up as we go,” said Cordray.
Cordray said he his office has received “hundreds” of calls and e-mails about GMAC since he announced the lawsuit earlier this month.
“Some of it will turn into evidence,” he said.
Cordray’s office currently has a core team of three attorneys, two investigators and a paralegal assigned to both the GMAC suit and the joint probe, his spokeswoman said.
Meanwhile the joint investigation, announced last week, is still in its preliminary stages, Cordray said.
Widespread loan modifications for homeowners would be a “good result” from the probe, Cordray said, though he wasn’t sure if that would ultimately be one of the remedies.
“We’ve just started the investigation, we don’t know how broadly the problem cuts,” Cordray said.
The attorney general declined to comment on any settlement talks with banks, but a spokesman for Brown, a Democrat who is running for governor, said he didn’t believe there had been any.
Reporting by Dan Levine; Additional reporting by Joe Rauch; Editing by Jackie Frank