By Kevin Chiu
The nation’s biggest bank resumed foreclosures in nearly two dozen states today, despite on-going legal battles over how it handled hundreds of thousands of foreclosures in courts where judges rule on homeowners losing their properties.
Band of America has at least $106-billion in mortgages in foreclosure, according to SNL Financial, an unprecedented event for any U.S. lender. A large percentage of its troubled home loans are from its portfolio of loans that it purchased from Countrywide Financial for $2.5-million as the company was failing at the height of the financial crisis.
BofA resumed foreclosures in 23 states after reviewing 102,000 instances of foreclosure in less than two weeks. The country’s biggest bank services one in five home mortgages, and in a statement released to the media it insisted that it had not found one single foreclosure where it made an error.
The lender is being investigated with at least three other major U.S. mortgage companies and banks for improperly filing paperwork in state and county courts without first reviewing documents properly. The suspected cases of fraud perpetrated by banks and mortgage servicing companies came to light after a series of bank employees testified under oath that they had not reviewed paperwork or documents necessary to legally file foreclosures. All 50 states Attorney Generals are investigating cases in all U.S. states and the District of Columbia.
Over the course of the last decade, Bank of America has grown from a regional institution mainly on the west coast into the nation’s largest consumer banking franchise and biggest brokerage house. During the financial crisis the nation’s most powerful financial institution tabulated massive losses from its takeover of Merrill Lynch, the once promising Wall Street giant, and huge losses in home mortgages.
Banking analysts say that an extended national foreclosure moratorium by the nation’s largest bank could throw the troubled economy into further chaos, and do more damage than good in the long run.
BofA suspended foreclosures in all 50 states to review its paperwork, and will continue to hold off on filings in the other 27 states until it is able to review foreclosure filings in those states as well. “We will continue to delay foreclosure sales in the remaining 27 states until our review is complete on a state by state basis. We anticipate over the course of this pause, less than 30,000 foreclosure sales will have been delayed,” BofA said in a statement.
“We anticipate that by Monday, Oct. 25, the first foreclosure affidavits will be resubmitted to the courts. Upon judgment, foreclosure dates will be set and Bank of America will resume foreclosure sales in such proceedings in the 23 judicial states,” BofA said. GMAC, now known as Ally Financial after it changed its name is also resuming foreclosures.