Bank of America® is the most recent big bank to put on hold mortgage foreclosures in 23 states around the U.S. Within two weeks of GMAC Ally halting home seizures and Chase suspending foreclosures, another of America’s biggest banks is reevaluating the way it does its foreclosures, according to Bank of America®.

UPDATE: Bank of America® on Friday announced it would suspend foreclosure sales in all 50 U.S. states.

Signing Off on Foreclosures Too Fast

The problems have arisen for each of the three banks because courts in the 23 states in question could potentially deem the banks faulty for not reviewing the foreclosure documents carefully enough before signing off on them. The law requires bank officers to read through affidavits before signing them to ensure their accuracy. Bank of America®, along with Ally and Chase, are putting the brakes on their foreclosure departments to ensure their foreclosure process passed muster. The 23 states affected are territories in which foreclosure proceedings are governed by the courts.

Bank of America® is in the process of reviewing their foreclosure documents “to be certain affidavits have followed the correct procedures,” according to a statement from Rick Simon, Bank of America® spokesperson. Bank of America®, the nation’s largest bank, did not disclose how many foreclosures would be affected by the issue. An Associated Press report last week included statements from a Bank of America® official indicating she signed between 7,000 and 8,000 foreclosure documents a month without reading them.

Citigroup and Wells Fargo have not halted mortgage foreclosures and have no plans to do so, according to statements to The Associated Press. Officials in the affected states are hoping the temporary mortgage freeze gives them time to sort through the backlog and clear up any issues.

States Impacted Include N.Y., Fla.

Some of the nation’s largest states and some of the states most hard-hit by the mortgage meltdown and real estate crisis are included in the list of 23 impacted states:

  • Connecticut
  • Florida
  • Hawaii
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • Nebraska
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Pennsylvania
  • South Carolina
  • South Dakota
  • Vermont
  • Wisconsin
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  • Jericks26

    What happened to the poor ripped-off folks in California?

  • Anonymous

    Write a complaint directly to the CEO of Bank of America….send it certified so you know it was received and you have proof.
    Kenneth Lewis
    Chief Executive Officer
    Bank of America
    100 North Tyron Street
    Charlotte, NC 28202

  • Usar4me

    There is a growing trend of arrogance found in the financial industry… one that has long IGNORED the Statutory requirements to establish a ‘Debt’ as a legal obligation. The proper filing of a claim in foreclosure by most state law requires that the claim be evidenced by the ‘original’ note and ‘mortgage documents’ including a complete payment history.

    The use of affidavits in place of the actual documents MUST STOP… Mortgages are notoriously sold and often payments are misapplied or applied with late fees that should not have been charged. Other problems exist in establishing the ‘True’ ownership of the mortgage. This practice is also prevalent in most cases involving ‘CONSUMER LENDING’. It is time that the courts require the ‘Statutory’ documents be filed with the suite… foreclosure or consumer note/credit card default.

    Affidavits don’t have the force of law nor do they disclose the terms of the original note and mortgage… often they simply state that the filer is the original owner of the note or its successor and maintains all the records on the note in default. However, disputes regarding the assignment and current owner can not be established unless the proper corporate and statutory documents are presented with the filing. There are cases where notes have been assigned more than ONCE… and where two or more entities claim to own the note and mortgage.

    In fact, there may well be a significant number of mortgages that have been sold more than once which in fact are being used to secure any number of BONDS or other Mortgage Backed Securities… The laws requiring the original documents and assignments must be presented with each case in order to ensure that those foreclosing or suing are in fact the owners of the note. Fraud has become a major problem in this industry and it is often facilitated by SHORT CUTTING the legal standards designed to stop such fraud.

    Make every lender establish their case according to the law… requiring them to produce the original NOTE, MORTGAGE INSTRUMENT and other Statutory documents proving they are the owners, that the balance demanded in in accordance with the terms of the Note, payment history, etc. Lawyers who protect their client’s interest in a foreclosure or law suit based on a financial contract and default should insist on such ‘Original’ documents be produced… not affidavits that they exist… or copies of such documents.

    Defense councils should also insist that the Bank or Financial Institution appear in person and not simply by proxy representation… a lawyer or collection agent (unless there is proper CORPORATE AUTHORIZATION ON FILE with the court binding the financial institution bringing the action to the statements and acts of their agent/lawyer). Such appearance being essential to the defense in its examination of the facts in the case thru direct examination of the Bank or Financial Institutions AUTHORIZED LEGAL representative… such examination also being the basis for attaching any liability for false claims directly to the bank of financial institution.