Bank of America stops US foreclosures for review

Poo

WASHINGTON (AP) -- Bank of America on Friday halted foreclosures on homes across the country so it could review paperwork in tens of thousands of cases for flaws, expanding a crisis at a perilous time for the housing market.

The move came as PNC Financial Services became the fourth major bank to announce that it would stop foreclosures in at least some states. It added to growing concerns that mortgage lenders have been evicting homeowners despite flawed court papers.

Bank of America, the largest U.S. bank, had said a week earlier it would stop foreclosures in the 23 states where the process must be approved by a judge. Ally Financial's GMAC Mortgage unit and JPMorgan Chase had announced similar plans.

Bank of America's nationwide halt will apply to homes that the bank is taking back itself and those for which it has transferred the papers to mortgage buyers Fannie Mae and Freddie Mac.

The bank said it had not found any widespread problems in the foreclosure process, but "We'll go back and check our work one more time," CEO Brian Moynihan told the National Press Club in Washington.

A Bank of America spokesman acknowledged that the bank acted in response to pressure from state attorneys general and other public officials inquiring about the accuracy of foreclosure documents.

"We feel the need to address that and demonstrate that our process is accurate," said the spokesman, Dan Frahm.

A document obtained last week by The Associated Press showed a Bank of America official acknowledging in a legal proceeding that she signed thousands of foreclosure documents a month and typically did not read them. The official, Renee Hertzler, said in a February deposition that she signed up to 8,000 such documents a month.

The bank said it would take a few weeks to tackle the problem. It did not say how many foreclosure cases would be affected but estimated the figure would be in the tens of thousands.

Senate Majority Leader Harry Reid, whose state of Nevada has been among the hardest hit by foreclosures since the recession began, and who is in a difficult fight for re-election, applauded the bank "for doing the right thing by suspending actions on foreclosures while this investigation runs its course."

Sen. Christopher Dodd, D-Conn, the chairman of the Senate Banking Committee, said he would hold a hearing on the issue next month.

The decision should help Bank of America manage its image during a dicey time for the industry, said Michael Robinson, a crisis communications expert with Levick Strategic Communications. Banks have been the target of widespread public anger since the financial meltdown.

"All the other banks are going to end up there anyway, either because they're going to be forced, or by political pressure," he said. "Americans, otherwise known as customers and voters, aren't over the economic crisis. You don't want to become a political pinata."

Banking and housing analysts fear the foreclosure document problems could prolong the already slow recovery in the housing market. Even if foreclosure is inevitable for tens of thousands of homes, the process could now drag out for years.

"If you are looking at the key in this country to economic stability, it's the housing industry," said banking analyst Nancy Bush of NAB Research. "This is a huge mess that helps nothing."

And some analysts and real estate agents worry that the uncertainty about the document mess could make potential buyers change their mind about purchasing foreclosed properties. That's because of fears that the former owners could turn around and sue.

"It's going to make people even more cautious: `Gosh, do I go in on a foreclosure?'" said San Diego real estate agent Jerry Adams Jr., who said he has seen one sale get put on hold. "It concerns me a lot."

The suspension in foreclosures could prop up home prices in the short term because fewer cheap homes would pour onto the open market in coming months. When those properties ultimately do go up for sale, the overall economy could be in better shape.

"The irony is, it may actually support the recovery," said Mark Zandi, chief economist at Moody's Analytics. "It may be that when those properties actually hit the market, the economy is in a better place."

PNC said its halt on most foreclosures and evictions applied to 23 states for a month, so it can review whether documents it submitted to courts complied with state laws.

An official at the Pittsburgh bank confirmed the decision on Friday after it was reported earlier by The New York Times. The official requested anonymity because the decision hasn't been publicly announced.

Also Friday, Litton Loan Servicing LP, a smaller mortgage company based in Houston, halted some foreclosures and evictions so it could review its handling of foreclosures. It made the disclosure in an e-mail to The Associated Press and did not say which states are affected.

Litton, owned by Goldman Sachs Group Inc., is a mortgage servicer. It collects payments but doesn't make loans.

And Stewart Title Guaranty Co. is clamping down on sales of foreclosed homes that may be linked to flawed documentation.

Houston-based Stewart issued guidelines to its agents that make it difficult to write policies on property foreclosed upon by JP Morgan Chase, Bank of America, OneWest Bank or GMAC, according to an internal memo obtained by The Associated Press.

Title insurance provides protection to a homebuyer and mortgage provider in the case of any unpaid taxes, questionable ownership or other problems.

AP Business Writers Michelle Conlin and Pallavi Gogoi contributed to this report from New York. AP Business Writer Daniel Wagner contributed from Washington.

Poo

怎么没人对这新闻感兴趣？
this news initially looks like positive to the housing market due to less foreclosures will come out to the market. But the problem will be that, not all those people have bought foreclosure might be in danger for future law sue mess between the foreclosed people and bank .

I think this create tremendous uncertainty for the mortgage and housing industry, drive people away from buying foreclosure property in the near future.

slowstep

This should be still a good news.

Cautious home buyers will buy something in ther market anyway and that will stabilize market.

Risk capital will find foreclosure propertys offered at surprisingly low price. Thus inprove the sale number.

Poo

Up To 40 States Plan Inquiry Into Foreclosure Data
(AP)   WASHINGTON (AP) - The attorneys general of up to 40 states plan to announce soon a joint investigation into banks' use of flawed foreclosure paperwork.

A person briefed on the investigation said Saturday night that an announcement could come as early as Tuesday. The person spoke on condition of anonymity because the investigation was not yet public.

Iowa Attorney General Tom Miller will lead the investigation. Miller already has been leading multistate reviews of questionable foreclosure documents.

A joint investigation by 40 states would further escalate pressure on banks to widen their suspensions of foreclosures. On Friday, Bank of America became the first bank to halt foreclosures in all 50 states.

JPMorgan Chase & Co., Ally Bank's GMAC Mortgage unit and PNC Financial have stopped foreclosures in the 23 states where foreclosures must be approved by a judge.

The plans for a joint inquiry were reported earlier by Bloomberg News.

A furor has been growing as evidence has surfaced that mortgage lenders have been using flawed court papers to evict homeowners. That's led state and federal officials to ramp up pressure on the mortgage industry.

Officials in several states have either announced they are investigating potential legal violations or have called for a freeze on foreclosures.

Ohio Attorney General Richard Cordray was the first to sue a mortgage company over the issue. He sued Ally last week, claiming the company's employees signed and filed false documents to mislead courts. Ally says the company's practices were neither fraudulent nor deceitful.

Attorney General Eric Holder has said the federal government is looking into the issue.

And Sen. Christopher Dodd, D-Conn., the chairman of the Senate Banking Committee, said he would hold a hearing on the issue next month.

Problems with foreclosure procedures were discussed during two recent conference calls between officials from the Treasury Department, Department of Housing and Urban Development, White House and other agencies, according to an Obama administration official who spoke Saturday on condition of anonymity because the meetings were private.

csw2002

The risk here is that there is now a possibility (and getting closer to probable) of systematic failure in legitimacy of the entire foreclosure process across the spectrum of mortgage debt, and in fact there is question as to whether the banks really own the properties they are foreclosing on. The knock-on effect would be that all the foreclosure sales over the last 2 to 3 years could be unwound. This would present absolutely massive liabilities for the banking sector.

One could take this one step further and argue that we may even see a complete moratorium of mortgage payment if there is a systematic issue with the whole mortgage origination process.

While the above two scenarios may seem extremely bearish for the banks and economy in general, the market may react bullishly. This is because if any of the above 2 scenario plays out, we will get another bail-out and Benanke put will be used by Fed to absorb all the mortgage liabilities banks have. The result of the additional cashflow to households from not having to make mortgage payment will then in turn support the economy in general. Of course that will also mean the likely end of the US dollar as the reserve currency.

atrader

越来越有中国特色了

xz214

wai-po

colderdown

胡同童鞋还没明白吗？如老马所言，资本主义已经完鸟，共产主义必胜。

dzyx

WASHINGTON (AP) -- Bank of America on Friday halted foreclosures on homes across the country so it c ...
Poo 发表于 2010-10-8 23:42

    I don't think it is a good news, but I could be wrong.