A week after it suspended home foreclosures in 23 states, Bank of America Corp. said its review of documents so far shows the information used to justify foreclosures was accurate.
Dan Frahm, a B of A spokesman, said late Friday that the review of thousands of affidavits, filed in foreclosure cases in the 23 states where the process is handled in the courts, has found that "the basis for foreclosure has been accurate."
Frahm would not say how many employees had been assigned to review the individual affidavits in thousands of foreclosure files. The review also assessed and validated the company's guidelines and procedures, he said.
Still, foreclosure sales remain on hold in those states, and earlier Friday, the Charlotte banking company expanded its foreclosure freeze to all 50 states.
"The concerns being voiced about the industry have moved from the signature on affidavits to [all] foreclosure documents," Frahm said. "This move is to address those broader concerns."
Ally Financial Inc.'s GMAC Mortgage and JPMorgan Chase & Co. have halted foreclosures in the 23 so-called judicial states.
Most states require that employees signing affidavits have "personal knowledge" of the information contained within the loan files. But in depositions, employees for each of the three servicers have said they did not verify the information.
"That's the quandary we've got," Frahm said. "You have the question around the signing and whether it was justified but pretty standard information that the facts supporting the foreclosure sales were accurate."
Brian Moynihan, B of A's chief executive, said at the National Press Club Friday afternoon that the moratorium should last only "a few weeks."
"We have not found any problems in the foreclosure process," he said, according to National Mortgage News. "We are going to go back and check our work one more time." The real impact, Moynihan said, will be in the build-up of foreclosed properties that cannot be sold right away.
The average B of A borrower who is in foreclosure has not made a mortgage payment in 18 months, Frahm said. At least one-quarter of the properties at the company's foreclosure sales are vacant.