Faced with increasing political pressure, Bank of America (BAC) on Friday became the first major bank to halt foreclosure sales and proceedings in all 50 U.S. states.
Banks have come under scrutiny in the wake of the disclosure that the industry’s foreclosure process had used “robo-signers,” or people who sign hundreds or thousands of documents a day without reviewing the details.
BofA, which is the largest U.S. mortgage servicer, said it has decided to extend the review of its foreclosure documents across the entire country.
“We will stop foreclosure sales until our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for foreclosure decisions is accurate,” BofA said in a statement.
The revelations on “robo-signers” have led a number of lawmakers have called for an industry wide moratorium on foreclosures amid concerns the process has been unfair to homeowners.
Last week BofA, JPMorgan Chase (BAC) and Ally Financial all postponed foreclosures in 23 states that require a court order to foreclose on a home.
“We continue to serve the interests of our customers, investors and communities. Providing solutions for distressed homeowners remains our primary focus,” BofA said in the Friday statement.
BofA’s new move takes effect on Saturday and the bank doesn’t plan to life the moratorium until it completes a review of the documents, The Wall Street Journal reported.
The announcement appeared to help lift BofA’s stock, which was up 1.1% to $13.46 Friday morning. The bank’s shares have slumped nearly 12% year-to-date.
- Bank of America to Halt Foreclosures Nationwide (dailyfinance.com)
- BofA Issues Nationwide Halt to Foreclosures (foxbusiness.com)
- BofA Stops Foreclosures In All 50 States (nytimes.com)
- Foreclosure Moratorium Would Be ‘Catastrophic,’ SIFMA Says (huffingtonpost.com)