Bank of America starts thaw in foreclosure freeze

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.

The bank's move could mean that the costs of the foreclosure-document mess will wind up being less than some investors had feared just days ago. Bank shares sank last week after JPMorgan Chase & Co. said it set aside $1.3 billion in the third quarter to cover legal expenses that include the foreclosure document problems.

Bank of America Corp. said it's confident of its foreclosure decisions. The bank is still delaying foreclosures in the 27 states that don't require a judge's approval. It said it's still reviewing its cases in those states.

The bank's move comes two weeks after it began halting foreclosures nationwide amid allegations that bank employees signed but didn't read documents that may have contained errors. These employees have earned the nickname "robo-signers."

The company said it plans to resubmit documents with new signatures in the 23 states that require judicial authorization to restart the foreclosure process. It will delay fewer than 30,000 foreclosures.

"The basis for our foreclosure decisions is accurate," Dan Frahm, a Bank of America spokesman, said in announcing the bank's new approach.

In some states, lenders can foreclose quickly on delinquent mortgage borrowers. By contrast, the 23 states in which Bank of America is restarting foreclosures use a lengthy court process. They require documents to verify information on the mortgage, including who owns it.

Those states are:

Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.

Article by Yahoo News

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