Bank of America has announced they will be halting foreclosures in all 50 states. This follows up on reports last week they would stop them in about 25 of the 50.
The problems stem from the fact that in states where judicial foreclosure is required the lender has to formally verify the documentation that they own the loan/etc. It seems that the banks had been winking and nodding at the process, just signing off on the paperwork without properly reviewing things.
In states like California the formal verification is not required but BoA is trying to avoid the bad press from all of the disclosures. The bank will still continue with the foreclosure process but won’t go to the actual step of selling the properties.
In the long run I’m not sure this is that big of a deal, it simply means that the banks will delay things for a while until they get their ducks in a row. Given that the holidays are coming up anyway they would probably like to avoid the bad press of throwing people out at Christmas, so most years they tend to slow down the process anyway.
But it still will be interesting to watch the process continue.