Bank of America Announces Nationwide Foreclosure Moratorium

Bank of America Announces Nationwide Foreclosure Moratorium

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America’s largest commercial bank, Bank of America, announced on Friday that it was stopping all foreclosure proceedings and the sale of already foreclosed homes. This move comes as the bank examines its review processes.

The bank posted a statement to their website announcing their decision stating, “Bank of America has extended our review of foreclosure documents to all fifty states. We will stop foreclosure sales until our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for our past 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.”

Millions Serviced

According to The New York Times, Bank of America services 14 million mortgages with 14 percent or nearly 2 million of those loans past due or in foreclosure. Tens of thousands of homeowners who were likely to lose their homes over the next few weeks will be given a reprieve although it remains to be seen whether any will be able to delay the process further once the bank resumes its foreclosures.

Consumer advocates are hailing Bank of America’s decision and are calling upon other banks to follow suit. One organization representing 280 nonprofits in the Golden State — the California Reinvestment Coalition (CRC) — claims that the bank used “robo-signers” who allegedly signed thousands of mortgage documents on a daily basis without properly reviewing the paperwork.

Foreclosure Redress

Said Kevin Stein, Associate Director of the California Reinvestment Coalition, “Millions of families across the country have already lost their homes. What redress do they have?”

Likely none, unless Congress intervenes. And, given that many the entire House of Representatives is up for reelection, the likelihood of anything being done is slim. This Election Day the Democrats may lose the House as voters signal their deep displeasure with the way Congress has been operating.

Federal Help

HUD, through its “Making Home Affordable Program,” is still working with homeowners in a bid to help them save their homes. The program was established by the Obama administration in 2009 as the federal government’s response to the housing crisis.

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Categories: Money News