Bank of America puts sales on hold

Houston Chronicle & San Antonio Express-News ^ | Oct. 8, 2010, 11:11PM | NANCY SARNOFF and JENNIFER HILLER

[thackney]

Bank of America, the nation's largest lender, said Friday it will suspend foreclosure sales across the country, a decision that could confound some Texans at risk of losing their homes and put further pressure on an already-struggling housing market.

The Charlotte, N.C.-based bank, which already had stopped repossessing homes in 23 states where fore- closures require court approval, expanded its freeze Friday amid growing concern over flaws in foreclosure documents.

Texas does not require judicial foreclosures, but Bank of America was among 30 lenders that received letters this week from Texas Attorney General Greg Abbott, asking that they put foreclosures on hold and review the way they document the procedures.

Bank of America is the No. 2 lender in the state behind Wells Fargo, with a market share of just under 10 percent, according to estimates from the Texas Mortgage Bankers Association. JPMorgan Chase ranks third.

Tens of thousands Bank of America said it would take a few weeks to tackle the problem, and estimated foreclosures involved would be in the tens of thousands, the Associated Press reported.

"We will stop foreclosure sales until our assessment has been satisfactorily completed," spokesman Dan Freed said in a statement, adding that an ongoing review shows the basis for past foreclosure decisions is accurate.

[thackney]

Of the 4,035 properties posted for the monthly foreclosure auction this week, 1,226 were filed by Bank of America or its subsidiary BAC Home Loans

[Silentgypsy]

How could this affect the people, homes, and banks involved? Just an opinion—short-term and possibly long-term. It can’t be good for the banks. Do you think it might invalidate sales in the first place because of sloppy practices?

[Sacajaweau]

They’re the nations largest lender so the numbers are quite reasonable.

[ChildOfThe60s]

This gets out of hand and theoretically we could end up with the US government being the single mortgage lender, government ownership of all mortgages.

That would end any illusions that we are still a republic. The Dems must be salivating right now.

[NoControllingLegalAuthority]

One major ramification of this fiasco is an overwhelming filing of lawsuits that could threaten the viability of the judicial system. The courts could see an overwhelming backlog of civil cases for a decade or more.

We're talking hundreds of thousands of foreclosures that could be challenged in court.

If the political establishment tries to sweep the problem aside with legislation, it could undermine the confidence of the American people in their system of justice. Such a widespread feeling of hopelessness and contempt for the judicial system could undermine our entire system of government.

It could also turn all real estate purchases into a casino gamble and could make appraisals of real property meaningless.

If title to real estate is a gamble, who'd invest in it?

[Roccus]

It’s not the foreclosures that are the problem. It is the whole system that was used to securitize mortgages and to sell and re-sell those financial instruments. The foreclosures merely brought these problems to light. If you are current on your mortgage and that mortgage has been securitized, you may find yourself unable to sell because clear title to your property very well may not be provable.

[Logical me]

Another thought. looking for another bailout. They will say this delay in foreclosures will force them in bankruptcy if something is not done. After billions go their way, our tax money, then they will continue the foreclosures and guess what. “Money in the bank” and will never stop unless we stop the Communists Party, (formally the Democratic Party).

[Timocrat]

They better get this under control quickly. If they stop foreclosures for a protracted period of time home loans are so large a aprt of teh banks balance sheets that the banks would all have “going concern” audit opinions. Also why pay your mortgage if Market Value is below your loan outstanding and you can live rent free until they sort this mess out.

[RideForever]

To get a clue about what this is about, you gotta watch this video -

http://www.youtube.com/watch?v=ssl5yb7FewA&feature=related

[Freddd]

Does this mean they have found the ‘toxic assets’?

[Clint Williams]

That would end any illusions that we are still a republic.

But we aren't. Let the illusions end.

America -- a great idea, didn't last.

[Clint Williams]

it could undermine the confidence of the American people in their system of justice.

We now live in a nation of men, not of laws. This "confidence" is totally misplaced.

America -- a great idea, didn't last.

[ChildOfThe60s]

But we aren't. Let the illusions end.

I agree. Perhaps if the majority of ostriches in this country saw that, they "might" begin doing what would be required to restore the republic. Although, I do not believe the vast majority of Americans will ever put freedom ahead of (perceived) safety.

[joelt]

You are absolutely correct... Millions of mortgages might have impaired titles,,,,, look out below!!

[MamaTexan]

If you are current on your mortgage and that mortgage has been securitized, you may find yourself unable to sell because clear title to your property very well may not be provable.

Any advice on how to go about making sure ones title is in the clear?

[gibsosa]

bump

[Roccus]

To the best of my knowledge (and believe me, that ain't much) you can investigate the chain of title at your local registrar's office. In my case it is the county clerk. HOWEVER, facts are emerging that the required registration of liens, assignments, transfers etc. were not always done in the manner prescribed by law....... and therein lies a problem of massive proportions.

[Timocrat]

Any advice on how to go about making sure ones title is in the clear?

If you do not have a mortgage or Home equity Loan you should be able to establish clear title thru your county records office. Chain of title should give you a clear title. A problem might arise if the party who sold you the house did not have a clear title but then you should have title insurance.

The main problem here arises when lenders attempt to foreclose and they cannot establish a clear right to foreclose because the lien on the property has not been properly passed down the various sale transactions when the lien was sold thus compromising the asset on the Lenders books. Often the original Mortgage or lien document cannot be found which is a big problem ( Also the new owners of the Lien or Mortgage may not have properly registered their interest in the Mortgage/Lien at the courthouse)

If you buy a foreclosed property and their is some doubt that all prior Liens have been cleared then you or a future purchaser may not be able to mortgage the property in the future.

[MamaTexan]

Thanks for the info!

Also the new owners of the Lien or Mortgage may not have properly registered their interest in the Mortgage/Lien at the courthouse

That's pretty much my biggest fear.

We're current on the mortgage, but the loan was sold to another company a couple of years ago, and I don't want to discover that there is something wrong with the title 10 or 15 years from now if we should decide to sell.

It's a kind of proactive measure on my part to make sure everything is okay now so it won't be a concern later.

Thanks again for your post!

[Timocrat]

I don't want to discover that there is something wrong with the title 10 or 15 years from now if we should decide to sell.

One other thing: Texas, I think is a " Deed of Trust" state so, if you make a final payment on your mortgage ( or decide to pay it off before) make sure you get the Deed of Trust and Promissory note back in exchange for the last payment. The Promissory note should have on it "Paid and Cancelled". Most commercial lenders do this routinely but with the apparent chaos in the documentation at Banks it might be worth actually meeting with your lender with the last payment and insist on getting those documents back in exchange for your last payment. Or at the minimum get a prior acknowledgement that the final payment discharges the promissory note. If you got the mortgage thru a private individual this is even more important e.g. Purchase Money Mortgage as they have quite often lost the original paperwork and therefore can't write the discharge notice on the note.