Bank of America Corp expanded on Friday its suspension of foreclosures to include all 50 US states as anger grows at how lenders have prepared documents to support evictions. BofA, the largest US mortgage servicer, is the first US bank to institute a nation-wide moratorium on foreclosures.
Previously, like Ally Financial's GMAC Mortgage and J.P. Morgan Chase, BofA had halted foreclosures in the 23 states that have judicial foreclosure proceedings. The US Senate Banking Committee announced on Friday it would hold a hearing November 16 into the foreclosure furor that includes disclosures that some big US mortgage processors filed false affidavits in thousands of cases.
The nation-wide 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.