Putting on the Brakes.
As you may have recently read, Bank of America shook the real estate market to the core a few days ago when it announced that it was suspending foreclosure sales in all 50 states while it reviews its internal process for handling foreclosure sales. This is an extension from the 23 states that they halted foreclosures sales on back on October 1. This action came after Bank of America admitted that employees may have pushed foreclosures through without verifying key information in the files, and may not have processed the files correctly.
You can almost envision the tsunami of lawsuits that will come out of this mess…
Q&A from BofA
While this action may not have huge effect on San Carlos homeowners, it’s still noteworthy. Right now, there are approximately 29 single family homes and condos in all of San Carlos that are in some form of pre-foreclosure proceedings. While it’s still a significant number, it’s far fewer than some surrounding communities, and it’s a safe bet that not all of these are with B of A. So the direct impact is likely even less.
For those who may be impacted, B of A released an official Q&A on their decision to halt foreclosure sales. Here’s that Q&A in its entirety:
- Bank of America has extended our review of foreclosure documents to all fifty states.
- Effective Sat., Oct. 9, we will stop all foreclosure sales until our assessment has been satisfactorily completed.
- Our ongoing assessment shows the basis for our past foreclosure decisions are accurate.
- Providing solutions for distressed homeowners remains our primary focus, and we continue to serve the interests of our customers, investors and the communities.
Questions and Answers:
Does this mean that Bank of America has announced a moratorium on all foreclosures?
No, this is not moratorium. We will continue the foreclosure process on delinquent borrowers, but will not proceed to judgment or with a foreclosure sale at this time.
What is a foreclosure sale?
After a severely delinquent customer goes through the foreclosure proceedings, their home becomes property of the investor or bank. At that time, the home is sold at public auction. It is only after that time that a customer may be evicted from their home.
How long will Bank of America stop foreclosure sales?
We will stop all foreclosure sales until our assessment has been completed. After that time, foreclosure sales will be rescheduled. It is estimated that we will begin the process of rescheduling foreclosure sales on Nov. 1 or earlier.
What does this mean for customers currently in the foreclosure process?
We will continue the foreclosure process on delinquent borrowers, but will not proceed to judgment or with a foreclosure sale at this time. Foreclosure sales scheduled for Sat., Oct. 9 or later will be stopped and rescheduled, as appropriate, at a later date.
What should customers do as a result of the announcement?
Customers do not need to take any specific action as a result of the announcement. Foreclosure attorneys have been informed of the postponement of all foreclosure sales as of Oct. 9. We will continue to follow our existing process of informing customers who are in the foreclosure process of the status of their loan. Should a customer have any questions, they can contact customer service at 1.800.669.6607.
Why is the bank taking this action?
Due to questions raised about the foreclosure affidavit signing process, we are taking these steps as a precaution as we review our process for handling foreclosure documents. Our ongoing assessment shows the basis for foreclosure decisions are accurate.
Does this mean Bank of America has been wrongfully foreclosing on customers?
No. Our ongoing assessment shows the basis for foreclosure decisions are accurate.
What does this mean for Bank of America’s previous announcement about delaying foreclosures in 23 states where courts have jurisdiction over foreclosures?
We have now extended our review of foreclosure documents to all fifty states.
What is a foreclosure affidavit?
A foreclosure affidavit is a legal document filed with the Court that provides a summary of information about the foreclosure, the property and the amount that is owed on the note. In 23 states where the courts have jurisdiction over foreclosures, an affidavit of indebtedness must be submitted before proceeding with the foreclosure.
In which of the states do the courts have jurisdiction over foreclosures?
There are 23 states: 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.
Will listing be pulled from the REO brokers based on the announcement today?
The announcement does not impact the selling of homes that have previously gone through the foreclosure process and are currently being marketed by Bank of America as an REO property, or are currently under contract with a buyer. We are proceeding as we normally would with marketing and closing those properties. Only properties currently in a foreclosure or eviction status are affected by the announcement.
What does this mean for borrowers currently in the foreclosure process and who have been assigned a foreclosure sale date of Sat., Oct. 9 or later?
These foreclosure sales will be stopped. Foreclosure attorneys have been informed of this stoppage and a new foreclosure sale date will be scheduled after the completion of our assessment. It is estimated that we will begin the process of rescheduling foreclosure sales on Nov. 1 or earlier.
What does this mean for borrowers who previously went through foreclosure and had their property sold in a foreclosure sale before Sat., Oct. 9?
The foreclosure sale will stand and the process will continue as scheduled.
Will borrowers who have gone through a foreclosure sale – and are still in their home – be evicted?
Impacts to post foreclosure sale activities will be determined based on property ownership.
- If Bank of America takes ownership of the property after foreclosure sale (REO), Bank of America will not evict the occupants.
- If the loan is property of a third-party investor, Fannie Mae or Freddie Mac, they will take ownership of the property through their own REO process and will make a determination whether or not to evict occupants.
If a borrower has gone through foreclosure sale and their loan/property is now owned by a third-party investor or Fannie Mae or Freddie Mac, how can they determine if they will be evicted?
Eviction proceedings on properties owned by third-party investors, Fannie Mae or Freddie Mac are governed by those parties. Borrowers or their foreclosure attorneys will be informed of those decisions.”
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