Bank Of America Starts Thaw In Foreclosure Freeze
The pace of U.S. home foreclosures may not slow much after all. Bank of America said Monday that it plans to resume seizing more than 100,000 homes in 23 states next week. It said it has a legal right to foreclose despite accusations that documents used in the process were flawed.
It's not yet clear if other major leaders will follow suit and resume foreclosures in the states that require a judge's approval. But the move by the nation's biggest bank could give way to an industry-wide effort to push ahead with a wave of foreclosures that have depressed the housing market.
Bank of America Corp. says it's confident of its foreclosure decisions in a majority of its questionable cases. The bank is still delaying foreclosures in the 27 other states, which don't require a judge's approval.
Its move comes two weeks after the bank began halting foreclosures nationwide amid allegations that bank employees signed but didn't read documents that may have contained errors.
"The basis for our foreclosure decisions is accurate," Dan Frahm, a Bank of America spokesman, said in announcing the bank's new approach.
The company said it plans to resubmit documents with new signatures in the 23 states that require a judge's approval to restart the foreclosure process. It will delay fewer than 30,000 foreclosures.
Bank of America was the only lender to halt foreclosures in all 50 states. Other companies, including Ally Financial Inc.'s GMAC Mortgage unit, PNC Financial Services Inc. and JPMorgan Chase & Co., have halted tens of thousands of foreclosures after similar practices became public.
Shares of Charlotte, N.C.-based Bank of America had been flat earlier in the day but jumped on the news. They rose 36 cents, or 3 percent, to close at $12.34.
Analysts at FBR Capital Markets said in a note to clients that the bank's announcement demonstrates that the issue may be "overblown."
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