The Bank of America (BofA) has announced that it will partially lift its moratorium on foreclosures, a sign that the crisis over the US bank’s mortgage practices may be easing.
BofA’s move marked one of the first positive developments after the financial sector came under pressure after two weeks, of accusations that shoddy paperwork forced some people illegally out of their homes.
The crisis, which sparked government inquiries and drew public outrage, has threatened bank earnings and the condition of the fragile US housing market, battered with falling prices and foreclosures that hit nearly three million homes since January 2007.
The BofA, which implemented moratoriums earlier this month, said it would resume foreclosures in 23 states starting October 25, when it begins refiling amended affidavits on 102,000 foreclosures.
For the remaining 27 states, where a judge’s approval is not necessary, BofA will continue reviewing the issues for an undetermined period, but fewer than 30,000 foreclosures sales are expected to be delayed as part of its temporary moratorium.
“As was the case for our judicial state review, our initial assessment findings show the basis for our foreclosure decisions is accurate,” said Dan Frahm, a BofA spokesman.