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Bank of America delays foreclosures in 23 states

WASHINGTON — Bank of America is delaying foreclosures in 23 states, including Florida, as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.

The move adds the nation's largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them. Bank of America isn't able to estimate how many homeowners' cases will be affected, said Dan Frahm, a spokesman for the Charlotte, N.C., bank.

Two other companies, Ally Financial's GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public.

A document obtained Friday by the Associated Press showed a Bank of America official acknowledging in a legal proceeding that she signed up to 8,000 foreclosure documents a month and typically didn't read them.

The official, Renee Hertzler, said in a February deposition that she signed 7,000 to 8,000 foreclosure documents a month.

"I typically don't read them because of the volume that we sign," Hertzler said.

She also acknowledged identifying herself as a representative of a different bank, Bank of New York Mellon, that she didn't work for. Bank of New York Mellon served as a trustee for the investors holding the homeowner's loan.

James O'Connor of Fitchburg, Mass., a lawyer for the homeowner in the case, said such problems are rampant throughout the industry.

"We have had thousands, maybe hundreds of thousands of foreclosures around the country by entities that did not have the right to foreclose," O'Connor said.

Consumer advocates say the problems are widespread across the lending industry.

"The general level of sloppiness is pervasive around the industry," said Diane Thompson, counsel at the National Consumer Law Center.

Vickee Adams, a spokeswoman for Wells Fargo & Co., said Wells' "policies, procedures and practices satisfy us that the affidavits we sign are accurate."

Mark Rodgers, a spokesman for Citigroup, said the bank "reviews document handling processes in our foreclosure group on an ongoing basis, and we have strong training to ensure that appropriate employees are fully aware of the proper procedures."

Mortgage finance companies Fannie Mae and Freddie Mac said Friday that they're directing companies they work with that collect loan payments to follow proper procedures.

In some states, lenders can foreclose quickly on delinquent mortgage borrowers. But 23 states use a lengthy court process for foreclosures. They require documents to verify information on the mortgage, including who owns it. Florida, New York, New Jersey and Illinois are the biggest states with this process.

Bank of America delays foreclosures in 23 states 10/01/10 [Last modified: Friday, October 1, 2010 10:18pm]
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