Bank of America lifts foreclosure freeze
Bank of America lifted its national foreclosure freeze this week and began taking back some 16,000 properties, starting with homes that were either vacant or did not have owners living in them.
The bank, which is the largest financial institution in the U.S., declared a national freeze on foreclosure sales in October, after it acknowledged it had employed people who legally attested to the accuracy of foreclosure documents without reading them.
But just three weeks into the freeze, BofA began resubmitting the legal documents necessary for foreclosure in some 102,000 cases, in the 23 states that require a court order to take back a home -- much faster than most analysts had expected in those states.
Until this week, however, it had kept its freeze on foreclosures in place in the 27 so-called non-judicial states – where a court order is not required - which include California.
The bank said in a statement Thursday that it had completed its review and is comfortable resuming its taking back of homes.
"The review shows the basis for our foreclosure decisions has been accurate,” said Barbara Desoer, president of Bank of America Home Loans. “We have identified areas of our process that can be improved, and while we make these improvements, it’s important that we move ahead with efforts to reduce the number of abandoned properties across the country. These properties can drag down home values in neighborhoods and slow the eventual recovery of the housing market."
BofA said it was taking some steps to improve its foreclosure processes, including better training of its workers and its outside counsel, as well as ensuring that the affidavits the bank submitted to courts in the judicial foreclosure states were "reviewed, properly executed and notarized."
Sean O'Toole, founder of data-tracking firm ForeclosureRadar, said on Thursday that foreclosures by Bank of America had spiked by 10 times this week compared with last week.
O’Toole said that declaring a national freeze -– so as to encompass states such as California, which did not have any high profile cases of robo-signers -- was probably largely a public relations move and that there were likely few problems with the process in the Golden State.
"It was probably more due to political expediency than actual underlying problems in their processes here,” O’Toole said. “I think it was politically popular for them to show an abundance of caution and slow things down.”
-- Alejandro Lazo