NEW YORK — Foreclosure-fraud class-action lawsuits are starting to pile up against major banks across the country, threatening a besieged industry with billions more in potential losses.
Bank executives are swarming Capitol Hill this week to defend themselves against multiple foreclosure-related investigations, including one by all 50 state attorneys general. Talks are underway in that probe in hopes of reaching a settlement.
But a congressional watchdog said in a report Tuesday that the foreclosure-document debacle could threaten major banks with billions of dollars in losses, prolong the housing depression and damage the government’s effort to keep people in their homes.
The class actions seek damages for people whose properties were illegally foreclosed upon by banks using fraudulent documents. Suits in Maryland, New Jersey and Massachusetts target Bank of America, Wells Fargo, HSBC and JPMorgan Chase. In Florida and Maine, Ally Financial, formerly GMAC Mortgage, is also targeted.
Perhaps an even bigger threat are the lawsuits that contend the banks’ foreclosure machinery amounted to a racketeering enterprise.
