More bad news for banks and servicers on the foreclosure improprieties front. The latest report, that Bank of America is stopping foreclosures in 23 states, confirms the suspicion that problems with foreclosure procedures for residential home loans in securitizations are widespread. From the AP via Washington Post:
Bank of America says it is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.
Bank of America is not yet able to estimate how many homeowners cases will be affected, a spokesman for the nation’s largest bank says.
A bank official acknowledged in a legal proceeding in February that she signed up to 8,000 foreclosure documents a month and typically didn’t read them. The Associated Press obtained the document Friday.
The executive’s admission adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.
On a separate front, Reuters reported earlier today that the Connecticut AG has called for a 60 suspension of all foreclosures in the state:
Connecticut’s attorney general on Friday called on state courts to freeze home foreclosures for 60 days after borrowers claimed that major lenders may be making misstatements in the foreclosure process.
The attorney general, Richard Blumenthal, also said he is investigating JPMorgan Chase & Co over its foreclosure practices. He previously said he was investigating Ally Financial Inc and its GMAC Mortgage unit.
“Banks that lured consumers into loans they couldn’t afford now seek to stampede them into foreclosure,” Blumenthal said in a statement. “This freeze should stop a foreclosure steamroller based on defective documents and enable effective remedies.”
Finally, stocks in the direct firing line of these developments are taking hits. Lender Processing Services, which effectively subcontracts much of the opereational work of foreclosing to foreclosure mills around the US, was down 5% on heavy volume. Title insurer stocks were also down on foreclosure abuse concerns.