BofA, PNC Announce More Halts in Home Foreclosures
Bank of America announced Friday that it was extending its current halt to foreclosures to all 50 states, while PNC said it is halting most foreclosures and evictions in 23 states for a month so it can review whether documents it submitted to courts complied with state laws.
PNC becomes the fourth major U.S. lender to halt some foreclosures amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.
Two other companies—Ally Financial's GMAC Mortgage unit and JPMorgan Chase have announced similar moves in the past two weeks.
Bank of America, the nation's largest bank, had previously said it would only stop foreclosure sales in the 23 states where foreclosures must be approved by a judge.
The move comes amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.
The nationwide Bank of America halt on foreclosures will take effect on Saturday and also includes sales of foreclosed property.
Bank of America spokesman Dan Frahm did not give a specific timeline for how long the halt will remain in place, but described the review as lasting for weeks, rather than months. "We will stop foreclosure sales until our assessment has been satisfactorily completed," he said.
"Our ongoing assessment shows the basis for our past foreclosure decisions is accurate." Frahm said the company is reviewing its entire foreclosure process, but is focusing on the validation of signatures on foreclosure documents.
Critics, including prominent congressional leaders, contend that banks' use of "robo-signers" and other automated processes is unfairly pushing residents out of their homes.
Bank of America will continue to track late payments and pursue delinquent borrowers but will stop short of foreclosure on those mortgages held on its books—about 20 percent of the home loans it services.
Frahm said the average foreclosed borrower has not made a payment in 18 months. He declined to disclose how many foreclosures would be affected by the move.
Spokesmen for JPMorgan and Wells Fargo, another major mortgage servicer, declined to comment on the BofA move.
On Thursday, U.S. President Barack Obama refused to sign proposed legislation that would have made it more difficult for homeowners to challenge documents in a foreclosure.
Senate Majority Leader Harry Reid called on Friday for other banks to join Bank of America in a nationwide foreclosure moratorium. Reid, a Nevada Democrat facing a tough re-election campaign, called on Thursday for banks to suspend foreclosures in his state, one of the hardest hit by the housing crisis.
Bank of America became the largest U.S. mortgage servicer after purchasing Countrywide in 2008 at the height of the financial crisis.
At the time, California-based Countrywide was mired in high levels of soured subprime mortgages.
—AP contributed most of the reporting to this article.