It has been the biggest–and perhaps murkiest–legal story of the last two weeks: At least three major lenders have halted foreclosures, citing the need to review whether their mortgage documentation is in order and in compliance with court rules in the 23 states that require court approval before a foreclosure can take place. The decisions by the three lenders–JPMorgan Chase, Bank of America, and Ally Financial Inc.–have spotlighted tiny law firms that act as so-called foreclosure mills and the practice among lenders of hiring “robo-signers,” people who sign tens of thousands of documents per month, according to The Wall Street Journal and The Washington Post.
But a review of state and federal cases filed in the last few weeks shows lenders are turning away from the “foreclosure mills” and to large law firms when homeowners fight foreclosure and challenge banks to prove their documents are legit. In Florida alone, the following law firms have popped in contentious foreclosure cases in which judges have ruled homeowners might be onto something: Morgan, Lewis & Bockius, Greenberg Traurig, Akerman Senterfitt, and Gray Robinson.
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