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Banks Resume Foreclosures as Fraud Investigations Proceed

Bank of America and GMAC Mortgage announced this week that they are resuming foreclosure processing across the country. Within the last two weeks, the major lenders had announced a moratorium on foreclosure processing after it came to light that some of the required protocols for foreclosures had been abandoned because of the large volume of foreclosures coming before lenders every month. For example, lenders did not always have personal knowledge of the facts in each foreclosure as required, but simply signed them.

The lenders announced the moratorium in order to double-check their work. Bank of America said that it has not found a single case so far where a house was foreclosed upon in error. The lenders are asserting their confidence in their processes as several attorney generals are opening investigations into their practices. Last week, the attorney general of Ohio filed a lawsuit against GMAC accusing them of hundreds of counts of fraud related to the sloppy foreclosure documents.

Bank of America and GMAC have said their processes are sound. They are currently working to resubmit affidavits in the 23 states where a judge is required to sign off on all foreclosures. Bank of America's new paperwork will be done by next Monday and they expect to resume foreclosure sales in those 23 states in November.

Source:

Banks Restart Foreclosures (The Wall Street Journal)

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