Citing a May 17 deposition in which a JPMorgan Chase & Co. executive said she signed thousands of affidavits and documents supporting the New York-based bank's foreclosure claims without personally checking loan records, Lawyers for a Palm Beach County, Florida, homeowner have asked a court to throw out a foreclosure as a penalty for misleading the court, according to attorney Tom Ice of Ice Legal PA, an article by Lorraine Woellert and Dakin Campbell at Blomberg News today stated.

The Chase Home Finance operation supervisor, Beth Ann Cottrell, said in May she was among eight managers who together sign about 18,000 documents a month, according to a transcript of her sworn deposition provided by Mr. Ice, the article said, adding that "Asked how they were prepared, she said she relied on other people at the firm."

Inaccurate statements by banks in foreclosure documents may give borrowers who have lost their homes a legal basis to challenge the seizures, derailing resales and casting doubts on property titles, the article said, noting that "a Florida court sanctioned Ally Financial Inc.'s GMAC Mortgage unit for faulty affidavits in 2006, and the firm suspended evictions in 23 states this month after finding employees still signing affidavits without checking the data."

The article said that Ms. Cottrell "signed the affidavit at issue in the case, dated June 2009, while at her previous employer, an outside servicing firm working for JPMorgan, according to court documents. When signing documents there for the JPMorgan unit, she used the title 'assistant secretary and vice president' of Chase Home Finance, according to the transcript. She became a JPMorgan employee about three months after signing the affidavit. Document signers sometimes endorse affidavits on behalf of other firms as a way to streamline the foreclosure process, said Dustin Zacks, an attorney at Ice's firm."

JPMorgan was the third-largest U.S. servicer of home mortgages as of June 30, the article said, "with $1.35 trillion or almost 13 percent of the market, according to industry newsletter Inside Mortgage Finance. Servicers perform billing and collections on home loans. When borrowers default, the firms handle the foreclosure process. Affidavits lay the legal foundation for a foreclosure by attesting that the borrower is delinquent and that the lender is entitled to seize the home. Details of the JPMorgan case were reported earlier last week by the Financial Times."

"If the documents are shown to be false after a home has already been resold by a bank, that casts doubt on who is the rightful owner, said O. Max Gardner III, an attorney at law firm Gardner & Gardner PLLC in Shelby, North Carolina, who has represented homeowners in fighting foreclosures and has cases pending against JPMorgan," the article said, adding that he said that he was "sure a lot of title insurance companies are concerned about the potential liability right now," as borrowers challenge how banks made statements.

"The judges could absolutely hold the bank and attorneys in contempt," Mr. Gardner told Bloomberg.

U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc.

The article said that Mr. Ice, "the founding partner of his foreclosure-defense law firm in Royal Palm Beach, Florida, said some lenders are accepting voluntary dismissal of their cases."

"Judges overseeing foreclosures in the wake of the housing crisis are growing skeptical of banks, said Christopher L. Peterson, a professor at the S. J. Quinney College of Law at the University of Utah, who told Bloomberg in an interview that "a surge in proceedings has helped expose a variety of paperwork lapses," adding that "Now there are enough disputes out there about ownership of loans that the judges are starting to feel like they need to hold the financial institutions to the basic rules of evidence."