Bank of America Halts Foreclosures, HUD Calls on Servicers to Review Policies

Bank of America announced last week that it was suspending foreclosures nationwide after it was reported that employees had signed foreclosure affidavits without verifying loan information or other documents without a notary present.

“Bank of America has extended our review of foreclosure documents to all fifty states. We will stop foreclosure sales until our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for our past foreclosure decisions is accurate. We continue to serve the interests of our customers, investors and communities. Providing solutions for distressed homeowners remains our primary focus.”

Other companies including Ally Financial and JP Mortgage Chase also suspended foreclosures, but not across the country.  In response to the growing number of “robo-signers”, David Stevens, Commissioner of the Federal Housing Administration issued a statement urging FHA approved servicers to immediately conduct a full review of its servicing operations and procedures to ensure full compliance with all HUD requirements.

“HUD holds mortgagees accountable for their servicing practices in order to protect the public trust and the FHA Insurance Fund,” he said. “FHA-approved servicers are obligated to comply with all applicable laws and regulations.  When a servicer fails to comply with HUD’s policies and procedures, HUD will take appropriate action.”

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According to HUD, servicers that violate HUD statutes, regulations, handbook requirements or mortgagee letters may be required to repay loss mitigation incentives or indemnify HUD for any losses. In addition, mortgagees may be referred to HUD’s Mortgagee Review Board for appropriate sanctions.

 

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