October 8, 2010: Bank of America Corp., the biggest U.S. lender, extended a freeze on foreclosures to all 50 states as concern spread among federal and local officials that homes are being seized based on false data.
“We will stop foreclosure sales until our assessment has been satisfactorily completed,” the Charlotte, North Carolina- based company said today in a statement. “Our ongoing assessment shows the basis for foreclosure decisions is accurate.”
Bank of America, JPMorgan Chase & Co. and Ally Financial Inc. already froze foreclosures in 23 states where courts supervise home seizures amid allegations that employees used unverified or false data to speed the process. Bank of America’s new policy extends its moratorium to the entire nation, and the announcement spurred more demands from public officials and community groups for other banks to follow suit.
“We have a lot of people raising questions,” Bank of America Chief Executive Officer Brian T. Moynihan said today in an interview in Washington before a scheduled speech to the National Press Club. The review “will take a few weeks” and is an effort “to clear the air,” he said.
On Thursday, the Senate Majority Leader, Harry Reid, urged all five large mortgage lenders to suspend foreclosures in Nevada until they have set up systems to make sure homeowners aren’t “improperly directed into foreclosure proceedings”.
Nevada, where home repossessions are among the highest, is not among those 23 states where foreclosures must be approved by a judge, meaning that the process is relatively swift.
BoA company spokesman Dan Frahm said in a statement: “We will stop foreclosure sales until our assessment has been satisfactorily completed.”
But he added: “The basis for our past foreclosure decisions is accurate.”