Bank of America Corp. is halting foreclosure sales in all 50 states as it extends its review of foreclosure documents.
The Charlotte banking company said Friday that it will hold off on any sales "until our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for our past foreclosure decisions is accurate."
B of A had halted foreclosures in the 23 states where they are handled by courts last week, following similar moves by Ally Financial’s GMAC Mortgage and JPMorgan Chase. The servicer is the first to extend the moratorium to all 50 states.
The companies said they were slowing foreclosures after discovering problems in the way affidavits and other court documents were executed. The issue was brought to light in depositions of employees, who revealed that they routinely signed thousands of documents a month without verifying the information or having a witness present, which is required by law.
The New York Times reported Thursaday that PNC Financial Services Group had also suspended foreclosure sales, citing a title insurer that had received a memo from the Pittsburgh bank. PNC spokesman Fred Solomon told American Banker that the bank had begun a review of its mortgage servicing procedures, but would not comment beyond that.
Several attorneys general have opened investigations into the matter. On Wednesday, Ohio's attorney general filed a civil fraud suit against GMAC Mortgage.
U.S. Attorney General Eric Holder has been reported as saying the Department of Justice is looking into the matter.
Officials in states where foreclosures are handled outside of court, including Texas and California, have also gotten into the fray, seeking a freeze on foreclosures and an investigation into the practices.
Foreclosure Pause Sought in Nevada
In other foreclosure news, Senate Majority Leader Harry Reid joined the growing group of lawmakers Thursday to call for a foreclosure moratorium after allegations that lenders including BofA and JPMorgan relied on lax procedures and improper paperwork in seizing homes.
Reid released an Oct. 3 letter to Ally Financial, BofA, Citigroup, JPMorgan and Wells Fargo, asking them to suspend foreclosures in his home state of Nevada, which has been particularly hard hit by the housing crisis.
"I write to request that your mortgage-servicing division suspend foreclosures on Nevada homeowners until systems are in place to ensure Nevadans are not being improperly directed into foreclosure proceedings," Reid wrote.
Nevada is not among the 23 states where foreclosures have been stalled by servicers. Reid said it should be included even if its foreclosure rules differ.
"Recent reports that some mortgage servicers have made misrepresentations in foreclosure-related court documents revealed they are cutting corners in their efforts to process the large volume of delinquent homeowners," he wrote.
"Some servicers have rightfully suspended foreclosures in those states that have judicial foreclosure proceedings until they complete a review of their processes to ensure affidavits and other court documents meet the appropriate standards. While Nevada is not among those states, suspending foreclosures on Nevadans is also justified because the reports of shoddy and defective affidavit preparation suggest that servicers might not be reviewing a homeowner's loan documents with the requisite care."
