The Bank of America (BofA) has implemented a nationwide moratorium on foreclosures after the bank came under attack at how it handles documents to support the eviction process.
The largest US mortgage servicer is the first bank in the US to impose a nationwide moratorium on foreclosures.
“We will stop foreclosure sales until our assessment has been satisfactorily completed,” said Dan Frahm, a spokesman at BofA. “Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.”
The bank did not disclose the specific timeline for how long the suspension would last, but stressed the review will last for weeks rather than for months.
Mr. Frahm added that the bank is reviewing its foreclosure process, but is focusing more on the validation of signatures on foreclosure documents.
Critics, including US congressional leaders, said that the banks’ utilisation of “robo-signers” and automated processes tools is pushing US homeowners out of their homes.
BofA will continue tracking late payments and chase delinquent borrowers, but will halt foreclosures on mortgages held on its record. Mr. Frahm noted the average foreclosed home borrower has not made a mortgage payment in 18 months but declined to reveal the number of foreclosures that would be affected by their move.