On Friday, Bank of America, the largest U.S. mortgage servicer, announced a nationwide moratorium on foreclosure proceedings. The new moratorium follows a temporary halt in 23 states announced by Bank of America last week. This latest announcement comes amidst increasing calls from lawmakers and others for investigations into claims that faulty documentation and suspect procedures were used by mortgage servicers to facilitate speedy foreclosure proceedings. Senate Majority Leader Harry Reid thanked Bank of America for “doing the right thing by suspending actions on foreclosures while this investigation runs its course.”
Friday’s announcement was just the latest in a recent string of developments since reports surfaced of widespread misconduct in the foreclosure system and Ally Financial and JP Morgan Chase announced their own moratoriums. In response to the growing outcry, the Senate Banking Committee announced it would hold hearings on the matter and a number of state Attorneys General entered the fray, including those in California and North Carolina where Jerry Brown and Roy Cooper called on other lenders and mortgage servicers to follow Bank of America’s lead.
Other state Attorneys General have also been vocal about the problems. In Iowa, Tom Miller called for a halt to all foreclosures in the state, and in Ohio, Richard Cordray filed a lawsuit against GMAC for filing fraudulent affidavits. A number of other State Attorneys General previously weighed in by initiating probes to determine whether state laws were broken by the suspect procedures. In addition to lawmakers and states Attorneys General, labor unions, civil rights groups and even the White House, have voiced their concern about the problems.