Giant Bank Puts a Moratorium on Foreclosures Across the Nation

October 09, 2010

Chicagoland Real Estate Forum recently reported that Bank of America suspended foreclosures in 23 states due to the “robo-signing” controversy.

Starting today, the country’s largest bank based on assets will put a halt to foreclosures in all 50 states amongst concern that homes are being seized based on false data.

Bank of America signRobo-signers refers to lenders who sign thousands of foreclosure documents a month without reading them or verifying their accuracy, which is required by law.

According to RealtyTrac Inc., an online marketplace for foreclosed properties, lenders took possession of more homes in August than any month since the mortgage crisis began. In Cook County, one in every 239 Chicago homeowner received a foreclosure filing.

J.P. Morgan Chase & Co. and Ally Financial, previously GMAC, also have postponed foreclosures in the 23 states where courts have jurisdiction, and Fannie Mae will hold off on selling any foreclosed homes whose loans came from these banks.

Chicago Congressman Luis Gutierrez, who says the city has lost a ton of money in property tax and water bill revenue because of the foreclosure crisis, has asked the Special Inspector General of the Troubled Asset Relief Program to investigate foreclosure practices.

Rep. Edolphus Towns (D, N.Y.), chairman of the House Oversight Committee, is calling for a nationwide moratorium on foreclosures.

“The implications of ignoring the foreclosure problems are far too great to be ignored,” said Towns. “Bank of America did the right thing today and I expect to see every other responsible banking institution follow their lead.”

Categories: Economy, Mortgages

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[…] Chicagoland Real Estate Forum has been telling you about the “robo-signing” controversy, in which lenders have been signing hundreds of foreclosure documents a day without reading or verifying them. […]

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