Bank of America Says Foreclosure Sales Resume in Most States
Bank of America Corp., the largest U.S. mortgage servicer, said it restarted foreclosure sales in most U.S. states after fixing its practices and expects to resume in the remaining states in the current quarter.
“We identified and implemented process and control enhancements,” the Charlotte, North Carolina-based bank said today in a filing. “After these enhancements were put in place, we resumed foreclosure sales in most states.”
Bank of America halted foreclosures in all 50 states in October and announced in a Nov. 5 filing that it was reviewing as many as 102,000 cases to screen for faulty practices. Attorneys general in all 50 states are investigating foreclosure practices amid revelations that lenders were seizing homes without proper documents to prove they had the right to do so.
Bank of America said the preparation of affidavits will continue through the first quarter and could cause “prolonged adversary proceedings” that slow some sales. The lender said it has started “a rolling process” of preparing affidavits as needed to complete property sales.
The bank joined Wells Fargo & Co. in saying it may face an enforcement action or a fine because of state and federal probes of mortgage practices.
U.S. regulators may try to extract $20 billion of penalties in a settlement with banks that serviced loans, two people briefed on the talks said this week. Terms of an accord, from regulators led by the Treasury Department and Department of Housing and Urban Development, haven’t been formally presented to banks, according to the people, who spoke on condition of anonymity because the discussions aren’t public.
The largest servicers have undertaken reviews to assess the degree of faulty collection and foreclosure practices. Bank of America was still reviewing cases in 27 U.S. states, as of the Nov. 5 filing. Reviews in the 23 other states were complete and foreclosure affidavits were being resubmitted, the bank said.
Chief Executive Officer Brian T. Moynihan earlier this month separated the duties of resolving problem mortgages from the tasks of originating new business and servicing loans, promoting Terry Laughlin to head a new unit. Laughlin, a former FleetBoston Financial Inc. colleague of Moynihan’s, will be in charge of modifying delinquent mortgages, handling foreclosures and resolving investor disputes over faulty loans.
Bank of America is the largest U.S. mortgage servicer, according to industry newsletter Inside Mortgage Finance. The company oversaw $2.06 trillion in home loans at the end of 2010, according to an earnings presentation.
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