Bank Of America Extends Foreclosure Moratorium To California

CHARLOTTE, N.C. (AP) – A mushrooming crisis over potential flaws in foreclosure documents threatened to throw the real estate industry into chaos, as Bank of America on Friday extended a foreclosure moratorium to California and 22 other states, becoming the first bank to stop taking back tens of thousands of foreclosed homes in all 50 states.

The move, along with another decision on foreclosures by PNC Financial Services Inc., adds to growing concerns that mortgage lenders have been evicting homeowners using flawed court papers, without verifying the information in them.

Charlotte, N.C.-based Bank of America Corp., the nation’s largest bank, said Friday it would no longer complete foreclosures in all 50 states as it reviews documents used to process foreclosures. That applies to homes that the bank takes back itself and those that it transfers to investors such as mortgage giants Fannie Mae and Freddie Mac.

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

The bank did so in reaction to mounting pressure from public officials inquiring about the accuracy of foreclosure documents. 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 didn’t read them. The official, Renee Hertzler, said in a February deposition that she signed up to 8,000 such documents a month.

A company spokesman, Dan Frahm, said the bank still believes its documents are correct but wants to satisfy officials’ concerns.  “Our ongoing assessment shows the basis for our past foreclosure decisions is accurate,” he said.

Senate Majority Leader Harry Reid, D-Nev., who had called for such a suspension, applauded the bank “for doing the right thing by suspending actions on foreclosures while this investigation runs its course.” Also Friday, Sen. Christopher Dodd, D-Conn, the chairman of the Senate Banking Committee, said he would hold a hearing on the issue next month.

“American families should not have to worry about losing their homes to sloppy bureaucratic mismanagement or fraud,” Dodd said.  “Regulators at the federal, state, and local levels have a responsibility to uphold the law and protect consumers from unfair foreclosure, and lenders have a duty to not cut corners around the law.”

Banking and housing analysts, meanwhile, fear the foreclosure document problems could prolong the housing bust, and hundreds of thousands of inevitable foreclosures will be pushed off into some legal limbo 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 feel that uncertainty about foreclosures could make potential buyers change their mind about purchasing foreclosed properties. That’s because of fears that the former owners will turn around and sue.

However, there could be a silver lining to the problem. A delay in foreclosures could actually prop up home prices in the short term because fewer low-priced homes would pour onto the market in the coming six months. When those properties ultimately do go up for sale, the overall economy could be in better shape, said Mark Zandi, chief economist at Moody’s Analytics.

“The irony is, it may actually support the recovery,” Zandi said. “It may be that when those properties actually hit the market, the economy is in a better place,”

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 became the fourth major U.S. lender to halt some foreclosures. 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.

(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Comments

One Comment

  1. Bloodhounds says:

    Maybe the banks will finally get back what they deserve. You get what you put out there. I’m going to keep saying my prayers.

  2. sergio pena says:

    after charging consumer an a crazy rate on credit cards and late fees and every other charge they can, the consumer has a small revenge.

  3. David says:

    BofA is nothing more than a platform for overcharging clients using preditory methods that insure you will be hit with multiple overdraft and overlimit fees.
    Bank of America it is NOT.

  4. Joe Modderatz says:

    Obviously, Bank of America was notified it was breaking the law and was about to be sued! Not because the court or feds was ever gong to criminally prosecute the corrupt bank!

    Bank of America does nothing that isnt in the interest of itself! It is one of the most corrupt and unethicla banks in the nation

  5. oldfart says:

    The first line is “potential flaws” meaning it has not happened , probably will never happen, yet the entire process is stopped so some people can live rent free for up to a year at tax payer exense. .

    I have yet to read one story of a homeowner being served an eviction for foreclosure that was not on title and having their home sold out from under them, it just does not happen.

    This is just another example of a hidden entitlement program forced onto the private sector by government intervention to subsidize the low income allowing them to remain in their houses for up to a year, free, at tax payers’ expense .

    Who do you think is eventually going to pay the back due mortgages on these homes in foreclosures till the bank takes them back, —- you are

  6. A p giannini , where is my family can’t find nobody . Those idiots who running the bank of italy bank of america , jp morgan wellsfargo , has stolen everything from fraudulent, power of attorneys at the fulton county probate bate , under james grimes first citizen bank aka c&s bank .unitedbank ,washington mutal bank , nasionsbank. Pelican mortgage company , bank one ,bearstern companies , then , overheard at alliance bancorp ,comments by bankofamerica.com back typed . Its fraud . They runing bank of america , by fraud .

  7. Got a email from the singer – toni braxton , she said , a p giannini ,charles m ,merill , michael giannini , michael wells , michael fargo , all your bank debt – is on my credic report and I said too her , I’ve been trying to figure out who the theves ss number they was useing on all this fraud , but I would have never guess toni braxton ss number . Wow this some super fraud would u say . Jackie ramos , the lady they fired because she need to help people just like me and my grand dad would , my dad was like these people I’m a not ly , we got to get them out fast . My dad draw up a last will testment in 1998 . Its 2011 , that thing way to old to let the theves keep running it , congress , back date the law to 1998 , change law to a will testment , after 10 years old what ever its says for as owner and president of what they left behind onto the person they pick as owner today , no more waiting , 14 years to long to wait , when the world need help . Well that’s 2012 2013 . That’s too long we need go now , congress . If its frau , I still need in today . Those banks punching me in the face when I look at them , they want me in .

  8. Great blogs here , on fraud , but have u ever heard of , iirovocable trust ? Some benificary has those kind of trust where it looks like fraud , like my man up top said he has corp fraud and he’s a corp benificary owner of a company . Your case cannot be fraud , it sounds like iirovocable trust , u can ckec the united states trust laws on that , and if u don’t like ya trustee treatment toward u , then take them to court any judge can revoke the trust at any time . From the sounds of it and looks of it ,bank of america trustee need to be revoke by a judge .

  9. Great blogs here , on fraud , but have u ever heard of , iirovocable trust ? Some benificary has those kind of trust where it looks like fraud , like my man up top said he has corp fraud and he’s a corp benificary owner of a company . Your case cannot be fraud , it sounds like iirovocable trust , u can ckeck, the, united states trust laws on that , and if u don’t like ya trustee treatment toward u , then take them to court any judge can revoke the trust at any time . From the sounds of it and looks of it ,bank of america trustee need to be revoke by a judge . I belive that what u have ,those contract do go on for about 1 – 14 years .

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