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Friday, October 8, 2010

Bank Of America Immediately Halts All U.S. Foreclosures To Help Consumers! 50 States!

Bank of America Halts All U.S. Foreclosures

Bank of America, the nation’s largest bank by assets, is placing a moratorium on all foreclosure proceedings and sales across the United States, according CNBC and a report on The Wall Street Journal’s Web site. The postponement takes effect Saturday.

Separately, PNC Financial Services Group Inc. 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 PNC decision, which was reported earlier by the New York Times. The official requested anonymity because the decision hasn't been publicly announced.

The moves come amid mounting political pressure on big U.S. banks to examine foreclosure-documentation problems. Bank of America is the first financial institution to stop all foreclosure actions amid revelations that the banking industry had used "robo-signers," people who sign hundreds of documents a day without reviewing their contents, when foreclosing on homes, the Journal said.

In a statement released Friday, Bank of America said it will stop foreclosure sales until “our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for foreclosure decisions is accurate. We continue to serve the interests of our customers, investors and communities. Providing solutions for distressed homeowners remains our primary focus.”

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.

Bank Of America Gets Friday Deadline To Halt Foreclosures In N.C.

N.C. Attorney General Roy Cooper is giving Bank of America until Friday to halt foreclosure proceedings in the state amid concerns the Charlotte bank and other lenders haven't properly reviewed documents.

In a letter sent to the bank, Cooper questioned why Bank of America voluntarily suspended foreclosures in 23 states that involve a judicial process but not in its home state. North Carolina requires a "quasi-judicial" process in which clerks of court frequently review affidavits submitted by banks.

"If Bank of America has halted foreclosure proceedings in other states due to flaws in its affidavit process, we do not understand why Bank of America should routinely continue with foreclosures with the same flaws in North Carolina," Cooper's office wrote.

The attorney general wants the bank's foreclosures suspended until it shows its processes are legal. Bank of America said it's responding to officials' concerns.

"Our initial assessment findings show the factual loan information underlying our foreclosures is accurate," spokesman Dan Frahm said, adding the bank continues its "exhaustive efforts to assist our customers who have been unable to make their mortgage payments."

The statement did not address how Bank of America would respond to the Friday deadline set by Cooper.

Cooper has asked 13 other large mortgage servicers to also halt foreclosures in the state until they prove compliance. Those lenders have until Oct. 12 to respond to the attorney general's questions.

North Carolina is also seeking more information about practices at Ally Financial, which has halted foreclosure-related evictions in North Carolina and 22 other states.

In an interview, Cooper said lenders could be breaking an N.C. law requiring a good-faith effort to work out loan modifications if they're improperly handling foreclosure paperwork. One of his main concerns is that homeowners get a "fair shot" at loan modifications, he said.

The attorney general has broad powers to investigate unfair and deceptive business practices, including assessing civil penalties. Cooper said he didn't want to discuss possible penalties until he has heard back from the lenders.

"We are looking to work with the lenders to make sure they get it right," he said.

Among the lenders, Wells Fargo has said its procedures are appropriate and that it doesn't plan to halt foreclosures. BB&T and HSBC also said their processes comply with the law. Citigroup said it doesn't believe a suspension is necessary because it has no reason to believe its employees haven't been following procedures. JPMorgan and Ally have said they are reviewing affidavits and will fix any problems.

SunTrust said it's reviewing the attorney general's letter, while MetLife said it intends to cooperate. OneWest declined comment. Others didn't respond or couldn't be reached.

The attorney general's move comes after Bank of America, Ally and JPMorgan Chase stopped some foreclosure-related actions in about half of the country after concerns that employees and outside lawyers signed documents without verifying information. JPMorgan's moratorium includes North Carolina.

Attorneys general in other states and members of Congress have also called for foreclosure suspensions as well as investigations of lenders' procedures. On Wednesday, Sen. Richard Shelby, R-Ala., called on bank regulators to review the foreclosure activities at Bank of America, JPMorgan and Ally.

In some cases, in a process nicknamed "robosigning," bank employees have said they have rapidly signed documents, raising questions about whether they are properly verifying information about homes that are being foreclosed upon. In a deposition obtained by the N.C. attorney general, a Bank of America employee in Texas testified that she would sign as many as 8,000 documents in a month, often in batches.

In another case, a Wells Fargo supervisor based in Fort Mill testified to signing 50 to 150 documents per day. A Wells spokesman noted a judge reviewed the bank's procedures and dismissed the borrower's case, confirming the foreclosure as valid.

Although foreclosures are traumatic for homeowners and damaging to neighborhoods, analysts say the selling off of these homes to financially stable buyers is an important step in a much-needed recovery for the housing market. "If you freeze foreclosures, the overhang in housing gets worse," said Virginia-based banking consultant Bert Ely. "The market isn't clearing."

Cooper said he hopes lenders can work quickly through the process of verifying their practices.

"We don't want to stop foreclosures that are legitimate and need to happen," he said.

"We want to make sure that homeowners are getting a fair shot at keeping their homes and the process has been done legally."

New Foreclosure Mess Shows Need For Reform In North Carolina

For many North Carolina homeowners, losing their homes to foreclosure was devastating. It is beyond outrageous that many banks were so cavalier with the process that employees didn't even bother to read or verify the information in foreclosure documents.

It is even more dismaying to us that one or both of Charlotte's big banks may be among the culprits in this travesty of faulty work known as "robo-signing."

Bank of America has halted foreclosures while it investigates and straightens out faulty paperwork. It's delaying foreclosures in 23 states including South Carolina. Over the weekend, questions arose about Wells Fargo's foreclosure documents. Wells said it doesn't plan to delay foreclosures because it's confident its foreclosures documents are accurate.

We're not so confident. N.C. Attorney General Roy Cooper is right to ask lenders to suspend foreclosures in this state until they can show their process conforms with the law. Given how badly this state was hit with foreclosures, banks involved in lending to North Carolinians should be probing robo-signing practices.

Nationwide, Ally Financial's GMAC Mortgage unit and JPMorgan Chase have halted tens of thousands of foreclosures. Ally stopped evictions here and in 22 other states. Robo-signing is so prevalent more banks are expected to follow suit.

What are those practices? In some cases, bank employees admit they signed foreclosure papers without reading them or determining if crucial information - such as how much borrowers still owed on the property - is accurate. Sometimes documents were notarized illegally with indications that the notary did not actually witness the signing of papers.

These practices are unacceptable. Some appear to be illegal. The N.C. attorney general's office notified Ally last week that using unverified affidavits could constitute fraud. Cooper is right when he says that such practices could mean that "some N.C. homeowners may not be getting a good-faith shot at loan modifications."

This mess is exasperating. The reckless lending practices of financial institutions helped cause the foreclosure tsunami that swept over the country. That damage has been so hard to repair in part because many have been tight-fisted with money they could have loaned consumers and small businesses. Many lenders have been reluctant to modify mortgages, instead moving much too swiftly on foreclosure.

Some of that rush resulted in faulty paperwork that will be costly to fix. Courts may impose sanctions on lenders or force banks to pay borrowers' legal costs in these cases. Judges may even dismiss the foreclosures, barring lenders from refiling and awarding the home to the borrower.

These lenders deserve to be penalized if they failed to meet legal requirements before evicting defaulting borrowers from their homes. Consumers, who often also were losing their financial stability, deserved that consideration.

Belatedly, many lenders will now have to meet those requirements. Investigations by attorneys generals in several states and a probe by federal regulators are forcing them to do so. It did not have to come to this. But it is an apt reminder of why reforms and better oversight of financial institutions are so badly needed.

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Sources: BOFA, CNBC, McClatchy Newspapers, MSNBC,, Wikipedia, WRAL, Google Maps

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