By Timur Abimanyu, SH.

MH

The Washington Post

Bank of America latest to put hold on foreclosures
amid paperwork concerns

By Ariana Eunjung Cha, Washington Post Staff Writer , Friday, October 1, 2010; 9:06 PM

Bank of America, the nation's largest bank, on Friday became the latest lender to put
foreclosures on hold in 23 states because of concerns that court documents it submitted were
improperly prepared. Bank of America and other mortgage companies have been under
pressure to review their paperwork after employees and contractors said in sworn
depositions that, because of the enormous volume, they hadn't had the time to read the
documents, much less check them for accuracy. "To be certain affidavits have followed the
correct procedures, Bank of America will delay the process in order to amend all affidavits
in foreclosure cases that have not et gone to judgment," spokesman Dan Frahm said in a
statement. A Bank of America executive, Renee Hertzler, said in a February deposition in
Massachusetts that she signed as many as 8,000 foreclosure documents a month without
reviewing them. The deposition is similar to others taken from document processors at J.P.
Morgan Chase and Ally Financial, which have also frozen foreclosures over the past week.
The statements were taken by lawyers for homeowners contesting the seizure of their homes.
J.P. Morgan and Ally have said they believe in the factual accuracy of the documents they
submitted. Bank of America said it was still conducting a review.On Wall Street, the stocks
of companies that insure titles for homes were down Friday on fears of the worst-case
scenario: that flawed paperwork could be used in court cases by those who have been
evicted to reclaim resold properties. At least one such company, Old Republic Title, has
stopped insuring homes that were foreclosed on by Ally Financial or its GMAC mortgage
unit.

Heightened scrutiny
Bank of America's announcement comes as federal and state law enforcement officials have
stepped up their scrutiny of foreclosure practices. Connecticut Attorney General Richard
Blumenthal (D) announced a 60-day moratorium on foreclosures by all banks in the state,
making it the first jurisdiction to take such wide-ranging action. Blumenthal called the
actions of J.P. Morgan and Ally a "possible fraud on the court undermining the integrity of
the legal process and consumers' ability to fight foreclosures." He added, "This freeze should
stop a foreclosure steamroller based on defective documents and enable effective remedies."
Meanwhile, California broadened its moratorium on foreclosures by Ally Financial to
include those by J.P. Morgan Chase. Calling the companies' review of key foreclosure
documents a "ruse," California Attorney General Jerry Brown (D) ordered J.P. Morgan to
prove it is following the law before it resumes foreclosures in the state. The 23 states where
Bank of America, J.P. Morgan and Ally suspended some foreclosures require a court order
before a home can be seized. This approach is considered favorable for homeowners because
mortgage companies must submit more extensive documentation before they can foreclose.
Connecticut is on that list, but California is not.
Federal officials' reaction
At the federal level, officials in the patchwork of agencies responsible for policing banks
and the home loan market said they were also disturbed by the use of "robo-signers" at
mortgage companies.

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