Foreclosures Delayed In Twenty-Three States By Bank Of America
Twenty-three states have been given a break by Bank of America who have delayed processing foreclosures while they examine whether or not homeowners where rushed into the foreclosure process without actually reading the foreclosure documents.
The twenty-three states being affected by this are Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, and Wisconsin.
Bank of America is the largest bank in the United States. However, along with several other mortgage companies throughout the United States, Bank of American has now joined this long list that continues to grow where mortgage companies’ employees fail to verify information contained within the documents of foreclosure cases, but go ahead and sign the documents anyway.
It is unsure as to how many foreclosure cases are affected by Bank of America, but the bank has already made plans within the upcoming weeks to resubmit all corrected documents.
Other mortgage companies who have also delayed foreclosure proceedings include JPMorgan Chase and Ally Financial Inc.’s GMAC Mortgage, which has resulted in tens of thousands of cases with very similar problems.
Foreclosures could be contested by thousands of homeowners regardless if they have been completed or if they are still in the works due to these costly errors. This could create a foreclosure crisis for lenders, but homeowner’s are still likely to lose their homes if they are facing foreclosure.
In other news…
Regulators delayed Monday their vote on how to resolve the "too big to fail" problem, saying they needed at least another week to discuss their plan, Reuters reports.
At the beginning of the month, Federal Reserve chairman Ben Bernanke told the Financial Crisis Inquiry Commission that the resolution of the "too big to fail" problem was "the most important lesson of this crisis."
The Dodd-Frank financial reform, passed in July, gives regulators "resolution authority" to deal with this issue, but certain details of that authority need to be clarified. On Monday, the Financial Stability Oversight Council, a new agency created under the July legislation, told the Federal Deposit Insurance Corporation that it needed more time to draft the rule.
With its new "resolution" authority, the FDIC has the ability to seize large, "systemically important" financial institutions if they are in danger of failing. The FDIC would then chip off pieces of the institutions and eventually put those pieces up for sale.
Earlier this month, HuffPost's Shahien Nasiripour reported that the country's four biggest lenders -- Bank of America, JPMorgan Chase, Citigroup and Wells Fargo -- collectively hold roughly $7.5 trillion in assets, equivalent to more than half of the estimated output of the U.S. economy last year.
The FDIC said the seizure and liquidation process, if the government should need to implement it, would resemble bankruptcy proceedings, with senior creditors getting precedence over shareholders, Reuters says. The Financial Stability Oversight Council will meet for the first time on Friday, to discuss the details. If all goes according to plan, the rule will take effect during the start of next year.
