Mortgage Foreclosure Hault Widens as BofA extends freeze to 50 states

Bank of America has now widened it’s mortgage foreclosure halt from 23 to all 50 states. This follows as a growing number of mortgage lenders, such as GMAC Mortgage and JPMorgan Chase, have put a stop to foreclosures. Reports of problems involving paperwork and a lack of review of cases may have led to homeowners being evicted illegally. Some 40 state attorney generals are now investigating. The foreclosure halt by Bank of America in all 50 states is just the latest result of the subprime fiasco which now includes bank employees robo-signing and foreclosures being processed without proper documentation. The number of home foreclosures third quarter 2010 could be far worse than those in 2009.

One of the principle issues involved is whether or not the banks initiating the foreclosures are the actual mortgage holder? During the ‘hey-day’ of the housing boom, subprime mortgages were handed out like candy on Halloween to just about anybody. To cover these loans, banks would often sell the paper to another institution. Many ultimately were acquired by either Fannie Mae or Freddie Mac, who control a vast majority of all home mortgages.

Bank of America is the largest lender in the United States. They, along with JP Morgan Chase and Ally Bank, as well as others, first halted foreclosures in 23 states due to these problems with documentation and possible ‘robo-signing’ by employees without actually reading and reviewing the paperwork. With record numbers of home foreclosures being processed by banks through the courts, the potential for errors, false data and other issues increases.

Bank of America has now widened it’s mortgage foreclosure halt from 23 to all 50 states. There is no word yet if other lenders, such as GMAC Mortgage and JPMorgan Chase, will also extend their moratoriums on foreclosures. Some 40 state attorney generals are now investigating the legality of procedures used. The foreclosure halt by Bank of America in all 50 states is just the latest result of the subprime fiasco which now includes bank employees robo-signing and foreclosures being processed without proper documentation. The number of home foreclosures third quarter 2010 could be far worse than those in 2009.