After the scandals regarding wrongdoings in the oversight of many foreclosures, Citigroup is the first bank in attempting to come clean by reviewing about 14,000 foreclosure cases for potential errors. Harold Lewis, a managing director of the bank's CitiMortgage unit is expected to say that Citi is “reviewing about 10,000 foreclosure documents to ensure they are correct. Another 4,000 are being reviewed because they may not have been signed with a notary public present, as required by state law” (WSJ).
However, Citigroup continues to argue that it has a good foreclosures documentation process. It explains that the error in the foreclosures were due to the fact that “the affidavits now reviewed were done before the bank took steps to strengthen procedures and added staff to ensure foreclosures were being processed correctly” (WSJ). Citigoup assures its investors that this mistakes made were an exception to the rule and that its foreclosure documentation process is sound and there aren’t systemic issues.
Citigroup is just the first one in a long list of bank which will try to regain their credibility. “Several major lenders, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc.'s GMAC Mortgage and J.P. Morgan Chase & Co., have been reviewing thousands of foreclosure cases amid revelations they filed large numbers of foreclosure documents without properly reviewing their contents” (WSJ).
If the banks succeed in regaining the public confidence and trust it would be reasonable to expect a faster recovery on the consumer banking industry and vise versa.
sources:http://online.wsj.com/article/SB10001424052748703688704575621120748504644.html?mod=WSJ_Banking_leftHeadlines
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