B of A Halts Foreclosure Sales
Bank of America says it's pausing to review documentation process.
What some are calling the "foreclosure fraud scandal" has forced the nation's biggest bank to stop selling foreclosed homes.
Bank of America has halted sales in all 50 states until it can review potential flaws in foreclosure documents.
Still, the bank says it will actually continue to foreclose on homeowners behind on mortgage payments.
It simply won't sell the property until it can verify the foreclosure documents are accurate.
The decision follows a week of foreclosure fraud accusations leveled at not only Bank of America but others like JP Morgan Chase and Ally-GMAC after an employee in texas admitted to "robo-signing", approving up to 8,000 foreclosures a month without reading a majority of the paperwork.
With one in every seven Americans with a mortgage either behind on payments or currently in foreclosure the consequences for the banks might be enormous.
"We're probably going to see borrowers awarded some form of compensation for the fact that they were removed from their property in what amounts to an illegal foreclosure," says UNC Charlotte Professor Tony Plath.
Banks are expected to repossess a record 1.2 million homes this year, one million more than last year.