Bank Of America Stops Foreclosures In All 50 States

UPDATE: Senate Majority Leader Harry Reid (D-Nev.) supports Bank of America's decision to halt foreclosures across the nation, according to a release. "I thank Bank of America for doing the right thing," he said in a statement, calling on other lenders to follow the bank's lead and expand their foreclosure moratoriums.

Bank of America will stop foreclosures in all 50 U.S. states, CNBC and the Wall Street Journal report.

Last week the bank, the country's biggest by assets, announced it was halting foreclosures in the 23 states where foreclosures are processed in court, saying it needed to review foreclosure documents for potential errors. Now, the bank has extended that moratorium to all 50 states as it has decided to stop sales of foreclosed properties, blocking a major step in the foreclosure process.

The decision comes as a foreclosure crisis threatens the nation's housing market and larger economy. Reports of foreclosure processors approving documents without properly reviewing them and bank agents changing locks on the doors of houses that aren't even in foreclosure -- while the residents are inside -- pile ambiguity and scandal on the foreclosure system. Delays in the process further cripple the weak housing market.

Already, foreclosure ambiguities have begun to stall sales of foreclosed properties. The New York Times describes the case of a woman who was about to move into a house when Fannie Mae declared the property's foreclosure might not have been valid, and she was told to wait. While owners of foreclosed homes may be glad to see these proceedings halted, buyers of those homes -- and the larger housing market -- are suffering.

Analyst Christopher Whalen predicts the country has slogged only a quarter of the way through the massive foreclosure process, which he said could incite a crisis that would touch every corner of the U.S. economy.

In the years leading up to the housing crash, investors hungered for risky mortgages that banks would bundle and re-package into securities. This arcane market drove banks to initiate more and riskier mortgages at break-neck speeds. Consultant Janet Tavakoli has said the massive amounts of shoddy paperwork that accompanied this process are now being exposed, wreaking havoc on the banks and on the economy.

Comments

[Carolyn Ervette Powell]

10:48 AM on 10/12/2010

Bank of America wonder who brought the Ameriquest Mortgage and so called Ansell backed mortgages that is the loan company they used to set me up but it ends up at Dwek Soloman with John Gallager name on it which is connected to Detchese, Suisse and UBS I dont know why all of you are trying to tight me in the mess you have made but I know I know how to get me out. We can start from the beginning. Ok Commerical National Bank then to Trustmak forged docs then loan to Homeowners Loans sold to Centex who changed their name to NationStar who never foreclosed on me but house still in my name but under the table without my consent Lone Star sold it in Dwek Soloman case my car was used for another investor 1030 who is Neptune for the same property Teppco and Capmark also used my car put it in their bankruptcy thats why they stole it ok what is Yeshi and what does it mean to me? My trust fund disappears along with my dad James Powell tresury bonds. I have paperwork where I tried to get my trust fund the old New York Controller Allan is in court for fraud my paperwork got his name on it but I never got the money. Dead people filed over and over in newspaper for money they have no right for the VA issues checks to Vets that are dead, VA workers receiving checks illegally

[Martha Fair]

07:49 AM on 10/12/2010

We are looking for re-hab properties (mostly foreclosed and abandoned) which are for sale for under 59K. We want to pay cash for one and live in it since we no longer want to take a risk with another mortgage lender. Unfortunately, most of these properties are snatched up before we can even view them by wealthy investors from foreign countries who have the capital to invest sight unseen. America is becoming a nation of foreign slum lords who, once the bubble is over will be able to charge astronomical prices for rent and we will become a nation of slaves. Something must be done immediately to insure that owner-occupied buyers with cash are given presidence over these other investor slum lord people, since only owners who own their residence and live in it will care about the neighborhood and the condition of their property.

This is a disgrace.

[mcmutter]

08:04 PM on 10/11/2010

BAC sucks .... they will never ever treat you as a person ....

[Duppy]

07:40 PM on 10/11/2010

Bank of America is a dump. People should move their money from this place and it should be allowed to fail. What a waste of tax payer's money when they bailed this total waste of a bank out.

[Brooks Hargreaves]

02:51 PM on 10/11/2010

Thank you for your insight to this issue. I have a BofA mortgage that is about to go into default this month because I was one of several laid off four months ago and now my savings are dried up. But I did take action almost three months ago with no assistance except false promises.

Hearing of the Making Home Affordable plan that Obama declared, I did the right thing and contacted BofA, who after a questionaire said that I qualified for Unemployment assistance, and also a loan modification, all before having reached the point of default. If after several months I still could not afford the modified loan, they would help me put my home up for sale. Sounds great - it gave me some peace knowing that I am taking the right steps.

For the last three months, two to three weeks at a time, I call the bank asking for the paperwork and the bank tells me the paperwork to get this assistance will be sent within 5-10 business days, but still I have not seen it and now have spent my entire savings. I have no choice now, I cannot pay my mortgage this month, because of my inability to find work, increasing property tax due and now adding insult to injury, because the bank is not holding up their end of the deal. I should have gone to the government assistance site instead. They've wasted my time and reserve.

Any insight would be appreciated.

[mcmutter]

08:08 PM on 10/11/2010

I hope you put your house up for sale months and months ago - there is no reason to wait for the bank to give you the Ok to sell ....

[Peter Street]

01:18 PM on 10/13/2010

ok was in a very simular situation here is a time line march 09 with our note curent we asked bba for a modification as i could see myself becoming under employed....was told it would be reviewed in 60-90 days june 09 called bba and was told to wait another 30 days.....august 09 contacted a loan mod company (RIP OFF) paid them one payment and missed my first payment with bba (the mod company said it would help) missed one more payment in oct 09....dec 09 i was aproved for a temp mod lowering my payment 400 a month this was a 3 month temp modification.......payed that payment till may 2010.......june 2010got a letter from bba saying they would not modify my payment and would not help.....stoped paying outright after the letter figuring that we were loosing the house may as well save the money to move somewhere else.....sept 2010 got a letter from bba saying they would help short sell the house or could do a deed in lou of forclosure......oct 2010 contacted HOPE who spoke to bba and found out that forclosure was close bba would not accept any payment.....oct 2010 got a letter from bba offering the same terms of the first mod or they would forclose 2 days latter, also the same day they stoped all forclosures nation wide. i hope this helps and gl to all facing this

[munki]

01:25 PM on 10/11/2010

Way to stop bank from bleeding and turn the market higher...

Bank ruined many homeowner's credit... they are not qualified to obtain loans...

If that is NOT corrected... what is next? who can fix the market?

[Martha Fair]

07:56 AM on 10/12/2010

The way to stop banks from bleeding the market is to insist that they are kept to a code on all of their owned property and kept to the same standard that owner occupants are. Why the hell are they able to skate on the upkeep of all these properties. Time after time (in even wealthy neighborhoods) these foreclosed and abandoned homes become a refuge for meth factories, drug shooters and squatters. The yards have grass and weeds as tall as the roofs. The yards are littered with refuse, the windows broken and standing water and mold are overtaking these properties. They should be rented out for a reasonable rate and rehabed at the cost of these banks and all banks who refuse should be slapped with huge fines. This would clean up this foreclosure problem once and for all since most banks would not want the overhead on their balance sheets. This is crap that a homeowner can be fined for code violations and not the banks..after all, didn't the RepubliBilly Supreme court rule that banks should have the same right as the average individual citizen. Oh I see, it only works when it is to their advantage. LOL

[banker67]

08:42 AM on 10/11/2010

As others have said -- I repeat it because it bears repeating -- if they have in fact voluntarily stopped taking people's homes, they must have something far more sinister to hide.
And this goes for all major banks.
Bankers never, ever forgo profits for ethical or humanitarian reasons so if they are doing something even half-way decent, it's because something else has them scared.
My first guess would be some revelations about international money laundering for the drug cartels. I can't imagine any big bank refusing to making millions in fee for cleaning up criminal profits so there must be some absolutely irrefutable evidence that actually has them worried. Perhaps something so damning that top executives could wind up in jail. That's about the only thing I can think of that would worry our wealthiest, most powerful bank owners and executives.
I admit it: I am one of the last people to understand or have an inside track on our mega-system of 'national security banking,' but years of experience convince me that no bank acts ethically unless forced to do so.
Because the banks are now portrayed in the press as actually doing something reasonable and halfway fair, the most likely explanation is that someone somewhere in law enforcement is for once doing his or her job.
So I have hope. Not a lot, but some.

[Raccoon1]

09:55 AM on 10/11/2010

Illegally throwing people out of their homes might pose a bit of a problem for them. Fanned.

[grk96]

10:11 AM on 10/11/2010

No, I think it's as simple as the fact that no one's mortgages around the country are legally collectible. That's why this is such a hot button issue. We're all paying on mortgages that lack the proper documentation because of all the securitization.

[banker67]

05:47 PM on 10/11/2010

Actually, you make more sense than I did. It's the simpler answer and I like it better. Thank you.

[TeraWatt60]

02:15 AM on 10/11/2010

From the article:

"In the years leading up to the housing crash, investors hungered for risky mortgages that banks would bundle and re-package into securities. This arcane market drove banks to initiate more and riskier mortgages at break-neck speeds. Consultant Janet Tavakoli has said the massive amounts of shoddy paperwork that accompanied this process are now being exposed, wreaking havoc on the banks and on the economy."

Those defending the Banks or their "positions" should remember this and their bribes (contributions) kept these toxic mortgage securities largely unregulated.

Wall off the Investment Banking operations, very strictly, and make them take back their worthless paper...and then watch them spiral into the black hole of their making. The government can prevent the commercial banks from collapsing (FDIC) and re-capitalize them as in the 30's.

The foreclosed properties should , if primary owner occupied, be converted to rental units under a government agency on a "rent to re-own" basis. Rents to be determined by a realistic reassessment of the value of the home . "Investment" properties should be seized and either resold to primary homeowners OR resold as "Rent-to-own" properties.

The fact that the executives at BofA and Chase etc...will take a beating along with their greefdy "investors" is of zero consequence , let them learn "the real value of money " when one determines the "worth" of someone...they will find themselves in for a rude awakening

[Kai-HK]

02:14 AM on 10/11/2010

Just because their foreclosure process is faulty, and easily remedied, does not mean that the foreclosures are any less valid. The people being kicked out of their house are being kicked out for a reason, they did not honor their loan agreement. The banks lived up to their end of the deal, giving them the money to buy a house, they failed to service their debt… Time to go. No one to blame but yourself for taking on more debt than you could afford.

Kai

[ruthieb203]

02:50 AM on 10/11/2010

Do you really believe that everyone having a problem paying their mortgage took on more debt than they could afford? Do you think maybe that some could afford their mortgage at the time, but the (housing depression) recession, subsequent loss of jobs, high unemployment, reduction of income, may be a factor. And what or who caused the housing depression? "The banks lived up to their end of the deal" - wow. if fraud was their end of the deal, I guess they did.

[Kai-HK]

04:04 AM on 10/11/2010

Ruthieb203:

Thank you for your response.

a) By definition, if you do not have enough money to pay your debt service, you cannot afford it…whatever the reason. If you entered into an agreement and then some post-execution event happened that impaired your ability to honor your agreement, that is not the banks fault. That is your fault for not having a plan B. Own it. Don’t try shifting the blame on someone else.

b) Who caused the Recession? I would break it down as follows:

35%: The Fed and really loose monetary policy that caused a financial and moral bubble, ‘yield chasing’ and
25%: Congress for focusing on more minority home ownership rather than more prudent underwriting, resulting in loose regulatory oversight of Freddie & Fannie, and the mortgaging industry in general. They virtually ensured the creation of the subprime industry.
15%: Poor people who shouldn’t have bought a house they couldn’t afford and leveraging above their means.
10% The banks and mortgaging companies that dropped their standards
10%: Investment banks for leveraging and engaging in risk they didn’t understand
5%: The Credit Raters for not understanding the risk and doing their job.

You are assuming fraud with banks. I would argue that most of the fraudulent loans were provided by mortgaging companies not banks, and certainly not investment banks.

Kai

[grk96]

10:12 AM on 10/11/2010

Unless you work for a bank, why would you want to see anyone using fraudulent documents?

[Kai-HK]

10:55 AM on 10/11/2010

Agreed. I have no sympathy for fraud and i hope real cases of fraud are identified and prosecuted. There is a difference between fraud and improper process. To me it looks like this is an issue of poor process. I hope that they are able to fix it and get on with a new improved process that gets undeserving people out of their houses in the most expedient way possible.

Regardless, of the paperwork. People bought houses they could not afford and they have no right to those houses. Time to move on.

Kai

[milton305]

12:44 AM on 10/11/2010

B of A has a major part in "GhettoPysics" as well as the other Wall St pimps. A quick trip to your local theater and it will become clear why they have stopped kicking good people out of their American Dreams

[abbadabba]

09:01 PM on 10/10/2010

Anyone considered the plot that this strip torment of bad practice revelations was timed to crystalize the banks' character? GMAC is our oyster to fry. They kicked off the first shoe. Then the others followed in suits. Then Stewart reduces the whole mess down to SpongeBob's elevation including a railroad car escape scene OK'd by Congress which Obama vetoes in the nick of time. And cut.

Great job, Mr. President. There's champagne in your trailer.

Coming to a theatre near you. Progress! We don't bite the hand that feeds us! We demand that hand and food be clean!

[WhirledTraveler]

08:29 PM on 10/10/2010

HuffPo: Bank Of America Stops Foreclosures In All 50 States. "All" and "50" - how dumb are we? Oh, never mind. We have the Tea Party picking up where Bush 43 left off...

[jobrien1950]

08:37 PM on 10/10/2010

Well, it's 8:30pm in the evening, so .......

[TK Whatever]

07:08 PM on 10/10/2010

make banks to follow (and pay for) small scripts - let them taste their own medicine.

[topguide]

06:50 PM on 10/10/2010

The buck always stops at the Top. Obama needs to go.

[Simple Living]

06:40 PM on 10/10/2010

If the banks knew they were making crooked deals then they should be stuck with the loan and the homeowner. The homeowner should get to stay in their home and the banks should be made to work out a deal....period...