Pursuant to articles in today’s Wall Street Journal, Bloomberg, and the Washington Post, Bank of America Corporation has placed a moratorium on all foreclosure proceedings across the U.S. to examine its foreclosure documentation problems. This includes all Bank of America owned properties in the state of Nevada.
Bank of America is the first financial institution to stop all foreclosure actions Nationwide, a fall-out from the recent discovery that the banks have been remiss in keeping proper documents. The banking industry has been under fire for its use of “robo-signers”, bank employees who authenticate and certify documents necessary in foreclosure actions. Robo-signers are alleged to have executed thousands of affidavits a day without actually reviewing the corresponding loan files and related documents. The failure to properly certify the documents could lead to the unwinding of many foreclosures. In response to the growing concern, many lawsuits have been filed nationwide, governmental investigations have begun and the title insurance industry has refused to insure REO properties in some states.
Bank of America, J.P. Morgan Chase, GMAC, PNC and Ally Financial Inc. postponed foreclosures in 23 states last week just as the foreclosure press was accelerated. In August, lenders took possession of a record 95,364 homes and increased foreclosure filings to 338,836 homeowners, or one in every 381 households, according to RealtyTrac.
The decision by Bank of America to extend its ban on foreclosures to all 50 states takes effect Saturday. A spokesperson for Bank of America stated this morning that the bank will not re-commence the foreclosure process until it can properly assess all of its documentation. This may be a bit of reprieve for cash-strapped homeowners but may have an untolled adverse affect on those involved in real estate sales.
If you have recently been foreclosed upon or if your house has been or will be taken as part of a bankruptcy proceeding, call our office for information. Black & LoBello will be updating our website and Twittering with important information related to the foreclosure moratorium and its affect on Nevada residents and real estate professionals.
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Tisha Black Chernine, Esq.