Bank of America Foreclosure Review Uncovers ErrorsOct 26, 2010 | Parker Waichman LLP
Bank of America’s recent review of foreclosure paperwork did reveal some mistakes, according to The Wall Street Journal. However, the lender maintains that it has not yet seen any proof of wrongful foreclosures as a result of those mistakes.
Earlier this month, Bank of America, along with other lenders including GMAC Mortgage and JP Morgan Chase, suspended some foreclosure proceedings in 23 states because of irregularities in the way court documents were processed. The banks’ actions came after it was learned that some mortgage servicers employed people who could sign foreclosure affidavits so quickly they popularized a new term for them: “robo-signer.” In depositions taken by lawyers for embattled homeowners, some robo-signers said they or their team had signed 10,000 or more foreclosure affidavits a month. Those affidavits say the preparer personally reviewed the files, but in their depositions, the workers acknowledge they had no time to actually do that. In some cases, the affidavits weren’t properly notarized.
Eventually, Bank of America said it was expanding the foreclosure review to all 50 states. Shortly after, however, Bank of America resumed 100,000 foreclosures in the 23 states where they were initially suspended. That October 18 announcement did not say when foreclosures would resume in the other 27 states. At the time, the bank said no errors had been found in its review, a conclusion that was based on a sample of fewer than 1,000 files.
According to The Wall Street Journal report, Bank of America is now admitting that it has identified errors in 10 to 25 of the first several hundred foreclosure cases it has reviewed over the last week. The bank is working on resubmitting documents in 102,000 cases. The errors found so far were discovered in 1 percent of the first foreclosure files that Bank of America intends to resubmit to the courts in 23 states, the Journal said.
The problems uncovered by the review included improper paperwork, lack of signatures and missing files. In certain cases, information about the property and payment history didn’t match, the Journal said.
Despite finding the errors, a Bank of America spokesperson told the Journal that “the basis for the foreclosure decisions have been accurate and correct.”