According to numerous stories (1, 2, 3) today, due to ongoing concerns about their processes, including alleged “robo signing” of documents, Bank of America is halting foreclosure activity in all 50 states. What isn’t 100% clear from these stories is if this is just on the foreclosure proceedings side of the equation or if it also includes the bank owned homes they are selling to new buyers. Update: CNBC has a story about Fannie Mae halting foreclosure sale closings.
If there are concerns about the legality and accuracy of the foreclosure process, then I can easily see the need to halt all parts of the process to make sure they don’t have an even bigger problem later. On the other hand, Bank of America (who bought out Countrywide a few years ago) has a ton of foreclosure properties for sale and under contract – this suspension of the process puts these buyers’ home ownership dreams in real jeopardy.
Of course buyers wouldn’t want to buy a house that the bank doesn’t actually own but most buyers hadn’t considered this type of problem coming up when they made their offer. If this moratorium last too long, these buyers may end up with nowhere to live and an uncertain future for their home purchase.
Needless to say, this mess of a situation is far from over and I believe we will hear more amazing revelations in the coming weeks.