JPMortgage Chase, the largest bank on earth, temporarily halted foreclosures on more than 50,000 homes to review documents that "may" contain errors or outright fraudulent misrepresentations.

JPMorgan was the second major US bank to suspend foreclosures after depositions of executives and managers at many of the nation's largest banks revealed systematic fraud in preparing, executing and filing mortgage foreclosure-related documents.

In May 2010, Beth Ann Cottrell testified in a deposition that she and a staff of eight signed roughly 18,000 legal documents a month without reviewing most of them.  Jeffrey Stephan of GMAC said that he signed about 10,000 documents a month under penalty of perjury without personally verifying the information contained in the documents.

Banks and analysts said that the foreclosure moritorium was likely to remain confined to judicial foreclosure states, which are states where banks must bring an action in court before they can foreclose.  The largest judicial foreclosre states are New York, New Jersey, Illinois and Florida.  California is a non-judicial foreclosure state.  This means that lender misrepresentation or document fraud in California is unlikely to be uncovered unless the borrower sues the lender in a separate proceeding.

Lawmakers displayed frustration at Fannie Mae using "foreclosure mill" law firms under investigation for document fraud.  A Fannie Mae spokesperson said that the company would review the issue and consider setting guidelines or taking other action.  Several states' attorneys general claimed to be reviewing the issue.

Read the complete deposition of Beth Ann Cottrell

Read the complete deposition of Jeffrey Stephen

Read the complete deposition of William Hultman