UPDATE: BofA Resumed Default Notices Last Year After Brief Halt
NEW YORK (Dow Jones)--Bank of America Corp. (BAC) confirmed Tuesday that during its nationwide moratorium on foreclosures last fall, it also stopped delivering notices to delinquent homeowners that typically inform borrowers the bank is starting foreclosure.
The bank resumed foreclosures it had halted, along with notices of disclosure, in December.
That the bank specifically stopped issuing notices of default to borrowers during its moratorium is a new line in a story the bank longs to close. It is also not terribly surprising, given it was unlikely the bank would have initiated foreclosures during its review of its processes.
Moynihan BofA CEO
Earlier Tuesday, CNBC reported the bank had stopped notice of defaults in some states, along with the halt to foreclosure sales in the rest of the country that had been the focus of most reports on the problem. That report followed an article in the American Banker that highlighted notices of default as another possible legal headache for banks. The article said lawsuits have started pointing to issues in notices of default that echo issues found in foreclosure files that caused waves in the industry.
The bank, along with its giant lending peers, was caught using so-called robo-signers, employees who rapidly authenticated the massive piles of foreclosure paperwork without checking the facts behind the pages. Affidavits and signatures of the robo-signers had indicated they had, in fact, checked the documents, causing a legal stir for the banking industry.
A week after the initial halt, Bank of America imposed a nationwide moratorium on foreclosures and the sale of foreclosed homes, including the nonjudicial states that don't require court oversight.
That expansion, to the 27 nonjudicial states, led the bank to stop sending new notices of default.
Bank of America spokeswoman Jumana Bauwens said in an emailed statement the bank restarted the process, in both judicial and nonjudicial states, in December, as it had said at that time. The bank believes its foreclosure decisions were correct.
Of course they believe their foreclosure decisions 'were correct'..would they say publicly they weren't? Damn...their stock must be sinking faster than a turd in a toilet bowl with all this negative publicity.Tsk..tsk.