Aequitas Compliance Solutions, a Newport Beach mortgage regulatory compliance firm, was hired by Phil Ting, the San Francisco assessor-recorder, to audit the files of nearly 400 foreclosed properties in his county. Their report titled “Foreclosure in California: A Crisis of Compliance” was just released.
About 84 percent of the files contained what appear to be clear violations of law, it said, and fully two-thirds had at least four violations or irregularities.
Like 29 other states, foreclosures in California are not required by be overseen by a judge, so nobody has been paying much attention to what’s been happening.
Mr. Ting said his report was the first rigorous analysis of foreclosure improprieties in California and that it cast doubt on the validity of almost every foreclosure it examined. “Clearly, we need to set up a process where lenders are following every part of the law,” Mr. Ting said in the interview. “It is very apparent that the system is broken from many different vantage points.”
The recent $26 billion settlement between five large banks and 49 state attorneys general (including California’s) regarding foreclosure improprieties doesn’t cover most of the issues detailed in the report, which include potential felony charges for filing false documents.
In an interview late Tuesday, Mr. Ting said he would forward his findings and foreclosure files to the attorney general’s office and to local law enforcement officials. Kamala D. Harris, the California attorney general, announced a joint investigation into foreclosure abuses last December with the Nevada attorney general, Catherine Cortez Masto. The joint investigation spans both civil and criminal matters.
Will anyone actually go to jail over this? I’m not holding my breath.