Bill McCollum and Dan Gelber Offer Different Responses to Foreclosure Fraud

With reports out on foreclosures based on faulty evidence, Attorney General Bill McCollum released letters on Tuesday to Larry Litton of Litton Loan Servicing, Brian Moynihan of Bank of America, Jamie Dimon of JP Morgan and Chase, James Rohr of PNC and Michael Carpenter of GMAC Mortgage demanding they head to Tallahassee and meet with him on the matter.

I was distressed to learn from media reports that your company may have engaged in filing faulty affidavits in foreclosure cases in Florida courts with regard to ownership of promissory notes and affidavits that attested to personal knowledge of facts when, in fact, the affiant had no such personal knowledge, wrote McCollum. The net effect of these actions, among other things, has been to cast a shadow on the title to these properties which is of such proportions that at least one major title company is now refusing to write title insurance on foreclosed properties. Even more disturbing is that some of these foreclosed properties have already been sold and resold, and now their titles are in question, which may substantially slow the economic recovery for the citizens of Florida.

McCollum also noted that these problems have led to a temporary halt on foreclosures and a rise in lawsuits -- both of which he was against. In my view, the moratoria and the private litigation are counterproductive to obtaining the swift solution necessary to address this serious problem facing Floridas already fragile economy, he wrote.

Sen. Dan Gelber of Miami Beach, the Democratic candidate for attorney general, offered his own take on the matter and disagreed with McCollum on freezing foreclosures.

The attorney general must continue to take appropriate steps to carry out his investigation and demand that Floridians are protected, said Gelber on Tuesday. The industry must also spearhead voluntary efforts to freeze foreclosures when the integrity of the process has been called into question. Our economic recovery is heavily dependent on the strength of the housing market in Florida, and we must be careful not to impede legitimate home sales. However, we cannot tolerate fraud that results in Floridians having their homes unjustly taken from them or that results in clouded titles that further impede lending. If lenders are unwilling to take responsible action, then the attorney general must consider seeking a temporary freeze on foreclosures and pursue necessary legal action to protect Florida homeowners.