BofA, Wells Fargo, JPMorgan Chase, Citigroup and GMAC are accused of fraud
The nation's five biggest mortgage lenders are facing a major legal challenge in Massachusetts to seek relief for homeowners foreclosed on during the housing crisis, a case that could have reverberations for consumers across the nation.
In the first such lawsuit filed by a state, Massachusetts Atty. Gen. Martha Coakley claims that Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc. and GMAC Mortgage used fraudulent documentation in the foreclosure processes, took back homes without showing they owned the actual mortgages, and failed to uphold loan modification promises to borrowers in the state. Also named is the electronic mortgage registry known as MERS, which was set up by banks to track ownership changes.
Coakley said the lawsuit, filed Thursday, was necessary because "the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law."