Gosh, processing paperwork for foreclosures used to be so easy before the end of last month — when everyone started getting so picky, insisting that agents for the mortgage lenders actually read the documents they were signing. What do they expect? Have you ever tried to wade through all that legalese? And now look what’s come of it: On Friday, Bank of America became the next major lender to call for a time-out, announcing it would halt foreclosures and the sales of foreclosed homes in all 50 states — presumably until the company can figure out its best defense against lawsuits. Yes, that would include all B of A mortgages headed for foreclosure in Texas, where ordinarily courts don’t care whether an agent of the lender has any personal knowledge of the signed documents. Bank of America and its subsidiaries have accounted for 31 percent of all Harris County foreclosures so far this year, according to data dug up by Chronicle reporter Nancy Sarnoff.
Also getting in on the break: Litton Loan Processing Services, a division of Goldman Sachs. The Houston company announced Friday it would also stop pushing through foreclosure paperwork — though only in “certain cases.” Next to be held up in the paperwork traffic pile-up: title insurers. A statement released by the company tries to spin it in a different direction, but the AP reported Friday that an internal memo issued by Houston’s Stewart Title would “make it difficult” for the company’s agents to issue insurance policies for properties foreclosed on by Bank of America and other quick-signing lenders: JP Morgan Chase, OneWest Bank and the GMAC Mortgage unit of Ally Financial.
- Ally’s mortgage documentation problems could extend beyond 23 states [Washington Post]
- Bank of America puts sales on hold [Houston Chronicle]
Photo of Bank of America Center: Erin Ferguson