By THE ASSOCIATED PRESS
Published: October 8, 2010
WASHINGTON (AP) — Bank of America, the nation’s largest bank, said [on October 8, 2010] that it would stop sales of foreclosed homes in all 50 states as it reviews potential flaws in foreclosure documents.
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· Bank of America Corp
· JPMorgan Chase & Co
· PNC Financial Services Group Inc
A week earlier, the company had said it would only stop such sales in the 23 states where foreclosures must be approved by a judge.
The move comes amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.
“We will stop foreclosure sales until our assessment has been satisfactorily completed,” a company spokesman, Dan Frahm, said in a statement. “Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.”
Concern is growing that mortgage lenders have been evicting homeowners using flawed court papers. State and federal officials have been ramping up pressure on the mortgage industry over worries about potential legal violations.
On [October 7, 2010], the Senate majority leader, Harry Reid, Democrat of Nevada, urged five large mortgage lenders to suspend foreclosures in Nevada until they have set up systems to make sure homeowners aren’t “improperly directed into foreclosure proceedings.” Nevada is not among the states where banks had suspended foreclosures.
The Bank of America announcement came as PNC Financial Services Group said it was 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 [October 8, 2010], which was reported earlier by The New York Times. The official requested anonymity because the decision has not been publicly announced.
PNC becomes the fourth major United States 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.
In addition to PNC and Bank of America, Ally Financial’s GMAC Mortgage unit and JPMorgan Chase have announced similar moves in the past two weeks.
In some states, lenders can foreclose quickly on delinquent mortgage borrowers. By contrast, the 23 states use a lengthy court process. They require documents to verify information on the mortgage, including who owns it.