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BofA halts foreclosure sales in 50 states

WASHINGTON — Bank of America Corp., the nation’s largest bank and the largest bank in Maryland, said Friday it would stop sales of foreclosed homes in all 50 states as it reviews potential flaws in foreclosure documents.

A week earlier, the company had said it would only stop such sales in the 23 states where foreclosures must be approved by a judge.

The move comes amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.

“We will stop foreclosure sales until our assessment has been satisfactorily completed,” company spokesman Dan Frahm said in a statement. “Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.”

Concern is growing that mortgage lenders have been evicting homeowners using flawed court papers. State and federal officials have been ramping up pressure on the mortgage industry over worries about potential legal violations.

Maryland Gov. Martin O’Malley, Attorney General Douglas F. Gansler and U.S. Rep. Elijah Cummings asked mortgage lenders on Monday to delay foreclosure proceedings until they could review their processes and ensure borrowers are being treated fairly.

O’Malley praised the bank’s decision on Friday.

“I urge all other Maryland lenders to follow the example of Bank of America, and ensure that the homeowners of our state do not fall victim to similar improper filings,” O’Malley said in a statement.

On Thursday, Senate Majority Leader Harry Reid, D-Nev., urged five large mortgage lenders to suspend foreclosures in Nevada until they have set up systems to make sure homeowners aren’t “improperly directed into foreclosure proceedings.” Nevada is not among the states where banks had suspended foreclosures.

Also Friday, PNC Financial Services Group Inc. said it is halting most foreclosures and evictions in 23 states for a month so it can review whether documents it submitted to courts complied with state laws. An official at the Pittsburgh-based bank confirmed the decision on Friday, which was reported earlier by the New York Times. The official requested anonymity because the decision hasn’t been publicly announced.

PNC becomes the fourth major U.S. lender to halt some foreclosures amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.

In addition to PNC and Bank of America, Ally Financial’s GMAC Mortgage unit and JPMorgan Chase & Co. have announced similar moves in the past two weeks.

In some states, lenders can foreclose quickly on delinquent mortgage borrowers. By contrast, the 23 states use a lengthy court process. They require documents to verify information on the mortgage, including who owns it.

One comment

  1. the trouble with the majority of these cautious rules are that they apply directly to the buyers are liars club, over buying of homes they and their Loan Officer knew they could not afford, but because the \investors\ were hungry for new money, they, the investors, turned a blind eye to the \buyres and liars clubs\ bascially because they wanted the m o n e y. So the buyers, crooked Loan Officers, underwriters, appraisers and the INVESTORS, THE mortgage business is in the toilet. Review the loan pkgs, find the Loan Officers, underwriters and buyers, who all agreed to the fraud and put them in jail, and the will send a message to America, What you sow, so shall you reap. Amen

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