JPMorgan Chase, Citigroup and Wells Fargo must face claims over home foreclosure practices in a lawsuit brought by the Massachusetts attorney general, a judge ruled.
Allegations that the banks violated state law by conducting invalid foreclosures can proceed, according to a decision by Justice Judith Fabricant in Boston dated Nov. 30.
Invalid foreclosures resulting in properties with clouded titles may have caused harm to third-party purchasers “and the real estate market as a whole, and thereby to the public,” Fabricant wrote.
The three banks, along with Bank of America and Ally Financial’s GMAC Mortgage, were sued last year by Attorney General Martha Coakley, who accused them of using fraudulent documents in home foreclosures, foreclosing without legal authority, undermining public land records and misrepresenting loan-modification programs.
Some of the claims in the lawsuit were settled as part of a $25 billion pact reached earlier this year between the banks and 49 states. Fabricant dismissed claims related to the registering of real estate records.