SAN FRANCISCO Two major banks have halted the vast majority of their foreclosure sales in multiple states following the release of new guidance by the Office of the Comptroller of the Currency.
The abrupt slowdown by Wells Fargo and Citibank has come in response to the OCC’s April release of minimum standards for foreclosure sales, which usually are the final act in the foreclosure process. The Federal Reserve issued identical guidance to the banks it oversees, making the guidelines universal for the industry.
Within two weeks of the release of the guidance, Wells Fargo and Citi, along with JPMorgan Chase, all but stopped foreclosure sales. JPMorgan has since resumed its normal volume.
The halt is most dramatic with Wells, the nation’s largest mortgage originator. The bank’s foreclosure sales in five Western states California, Nevada, Arizona, Oregon and Washington dropped from as many as 349 per day in April to fewer than 10 per day across the entire region, according to Foreclosure Radar, a California real estate monitoring firm.
“Wells Fargo has temporarily postponed certain foreclosure sales while we study the revised guidance from the OCC,” a spokeswoman for the bank wrote in response to questions from American Banker, an affiliate of Credit Union Journal. The bank expects the delay will be brief.
A spokeswoman for Citi said that the bank is “in the process of complying and following the directive.” JPMorgan acknowledged that it temporarily halted foreclosure sales “out of an abundance of caution,” but says it has resumed them after validating that its processes comply with the OCC guidance.
The OCC acknowledged that some banks had drastically cut back on foreclosure sales. It declined to say if its April guidance was the result of new perceived shortcomings in the industry.
