Updated to include list of affected states.
CHARLOTTE, N.C. (
Bank of America
said Monday that it plans to resume foreclosure proceedings in 23 states next week, after modifying 102,000 foreclosure affidavits that were called into question.
BofA, the country's largest mortgage servicer, had halted foreclosure proceedings nationwide just last week. Spokesman Dan Frahm says that on Oct. 25, the first foreclosure affidavits will be resubmitted to courts in states that require a judge's approval before auctioning off a bank-owned home.
"We have reviewed our process for resubmission of foreclosure affidavits in the 23 judicial states with key stakeholders, including our largest investors," Frahm said in a prepared statement. "Accordingly, Bank of America today began the process of preparing foreclosure affidavits for submission in 102,000 foreclosure actions in which judgment is pending."
Foreclosures will remain delayed in the other 27 non-judicial states until the bank has completed its review. Less than 30,000 foreclosure sales are expected to be affected.
Bank of America's nationwide foreclosure halt came amid findings that employees of large servicers had been "robosigning" paperwork - signing thousands of documents without verifying the information properly. Other servicers have gotten caught up in the robosigning fray, including
PNC Financial Services
and GMAC, against whom Ohio Attorney General Richard Cordray filed a lawsuit. JPMorgan and GMAC both announced that they would halt foreclosures in the 23 judicial states, but no lender had gone as far as Bank of America. JPMorgan's review pertains to 115,000 foreclosures.
On Monday, BofA indicated that the problems were minor procedural issues rather than significant errors and that the homeowners had stopped paying their debts.
"As was the case for our judicial state review, our initial assessment findings show the basis for our foreclosure decisions is accurate," said Frahm.
The 23 states in which Bank of America will resume foreclosures are: Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.
Nonetheless, all 50 attorneys general have joined forces to investigate big banks' foreclosure practices, causing an overhang of uncertainty for many stocks. On Friday, Bank of America shares hit a 52-week low of $11.74, though Citigroup earnings helped lift the sector on Monday. Citi climbed 5.2% to $4.16 by late afternoon, with Bank of America up 3% at $12.34, Wells Fargo up 5.1% at $24.77 and JPMorgan up 2.6% at $38.10.
-- Written by Lauren Tara LaCapra in New York
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