According to CNNMoney.com, Bank of America is halting foreclosure sales in all 50 states as part of a widening investigation into the flaws in the foreclosure process. This announcement comes a week after BOA froze home foreclosures in the 23 states where foreclosures must be approved by courts. Today’s announcement will extend a review of foreclosure documents to all states.
The bank said that the foreclosure process will continue, but it will not proceed to judgment or foreclosure sale. Other banks, including JP Morgan Chase and GMAC, have also halted foreclosure sales in the past week. President Obama vetoed a bill on Thursday that would have made it easier for courts to clear foreclosures. The bill would have required courts to recognize documents notarized in other states.
In recent days, it was revealed that some bank employees had signed foreclosure affidavits without verifying that the documents were accurate.
This is not a surprising development, as many of these foreclosed and bank owned properties come with many headaches to potential buyer, including but not limited to delayed settlements, improperly recorded documents, and uncooperative asset managers and investors (the chief decision makers in these sales).