BofA Halts foreclosures in all 50 U.S. States

BofA halts foreclosures in all 50 U.S. States

Article by Joe Rauch – 1 hr 25 mins ago from Yahoo.com

CHARLOTTE, North Carolina (Reuters) – Bank of America Corp expanded on Friday its suspension of foreclosures to include all 50 U.S. states as anger grows at how lenders have prepared documents to support evictions. 

BofA, the largest U.S. mortgage servicer, is the first U.S. bank to institute a nationwide moratorium on foreclosures.

Previously, like Ally Financial’s GMAC Mortgage and JPMorgan Chase, BofA had halted foreclosures in the 23 states that have judicial foreclosure proceedings.

The U.S. Senate Banking Committee announced on Friday it would hold a hearing November 16 into the foreclosure furor that includes disclosures that some big U.S. mortgage processors filed false affidavits in thousands of cases.

The nationwide Bank of America halt on foreclosures will take effect on Saturday and also includes sales of foreclosed property.

Bank of America spokesman Dan Frahm did not give a specific timeline for how long the halt will remain in place, but described the review as lasting for weeks, rather than months.

“We will stop foreclosure sales until our assessment has been satisfactorily completed,” he said. “Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.”

Frahm said the company is reviewing its entire foreclosure process, but is focusing on the validation of signatures on foreclosure documents.

Critics, including prominent congressional leaders, contend that banks’ use of “robo-signers” and other automated processes is unfairly pushing residents out of their homes.

Bank of America will continue to track late payments and pursue delinquent borrowers but will stop short of foreclosure on those mortgages held on its books — about 20 percent of the home loans it services.

Frahm said the average foreclosed borrower has not made a payment in 18 months. He declined to disclose how many foreclosures would be affected by the move.

Spokesmen for JPMorgan and Wells Fargo & Co — two other major U.S. mortgage servicers — declined to comment.

On Thursday, U.S. President Barack Obama refused to sign proposed legislation that would have made it more difficult for homeowners to challenge documents in a foreclosure.

Senate Majority Leader Harry Reid called on Friday for other banks to join Bank of America in a nationwide foreclosure moratorium.

Reid, a Nevada Democrat facing a tough re-election campaign, called on Thursday for banks to suspend foreclosures in his state, one of the hardest hit by the housing crisis.

Bank of America became the largest U.S. mortgage servicer after purchasing Countrywide in 2008 at the height of the financial crisis.

At the time, California-based Countrywide was mired in high levels of soured subprime mortgages.

(Reporting by Joe Rauch; editing by John Wallace and Tim Dobbyn)

Article from: Yahoo.com