The heat is on: after pressure from the Senate and more homeowners, the country’s largest bank gives in.
Last Friday, Senate Majority Leader Harry Reid, D-Nevada pleaded to major mortgage servicers and banks to extend the recent foreclosure freezing to all fifty states. According to him, if homeowners in 23 states get a chance at delaying foreclosures, so do those from the remaining 27 states. And it seems that Bank of America has heeded to the plea.
The country’s largest bank, Bank of America, has announced last Friday that it is widening its investigation into the flaws of the foreclosure procedures. As a result, foreclosure sales in all 50 states are now put on hold. The bank previously froze foreclosure sales in the 23 states where foreclosure must be approved by a court.
Bank of America, however, stresses that foreclosure process on delinquent borrowers will still push through. The only procedures that they are halting, according to their announcement, are the judgment and foreclosure sales.
“We haven’t found any problems in the foreclosure process. What we are trying to do is clear the air, and say ‘We will go back and check our work one more time,’” says Bank of America President and CEO Brian Moynihan.
The review process being done by the bank will take a few weeks. In the meantime, other banks are giving in to the pressure as well: PNC Financial Services Group announced Friday that it is also suspending foreclosure sales for 30 days. Citigroup, however, refuses to make changes to its foreclosure procedures saying the bank sees no reason to believe that employees are not following proper policies.
In the past few weeks, Ally Financial (previously GMAC Mortgage) and JPMorgan Chase have also stopped foreclosure proceedings in 23 states. Ally, though, have not yet commented as whether it will follow bank of America’s expansion move.