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The wave of foreclosure action continues as Bank of America has suspended foreclosures in 23 states. The bank suspended all foreclosure proceedings in 23 states in light of questions regarding whether documentation problems exist. Like several other banks, including GMAC Mortgage and JPMorgan Chase, Bank of America is accused of rushing foreclosures without properly reading and verifying the documents.
Foreclosure is a topic that comes up often in the FindLaw blogs. Generally speaking, foreclosure is the right of a mortgage holder or other third-party lien holder to take ownership of the property and/or the right to sell the property.
Dan Frahm, spokesman for Bank of America, said that the bank cannot estimate the number of homeowners' cases that will be affected, The Associated Press reports. The move has bled into politics as well; several states are moving towards stopping foreclosures. California Attorney General Jerry Brown has called on JPMorgan to stop foreclosures unless it can demonstrate compliance with consumer law. Richard Blumenthal, Attorney General of Connecticut, asked a state court to stop foreclosures for 60 days.
The Associated Press obtained a document that showed that a Bank of America official signed as many as 8,000 foreclosure documents a month without reading them.
"The general level of sloppiness is pervasive around the industry," said Diane Thompson, counsel at the National Consumer Law Center.
It's certainly an issue to keep an eye on. The suspended foreclosures raise interesting questions for homes that have been foreclosed in the past several years. Will former homeowners have recourse against banks that did not have proper records? Could it be the next big class action?
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