Bank of America Resumes Foreclosures; Introduces Process Improvements

Bank of America has announced the resumption of its foreclosure sales after temporarily freezing it in October. The major lender voluntarily halted its foreclosures to give way to a review of the company’s foreclosure procedures. This decision came after numerous homeowners accused mortgage servicers of improperly handling foreclosure documents to speed up evictions from foreclosed homes.

After its review, the bank said it is more certain that its foreclosure decisions in the past were all accurate. It announced that it would restart foreclosures beginning with non-owner-occupied and vacant foreclosed properties. Bank of America said it would take a phased and deliberate approach in resuming sales of foreclosures.

The lender commits to ensure that every property would be foreclosed only until the homeowner or customer is given appropriate and required opportunities to be assessed for possible loan modification. If the borrower does not qualify for any modification program available, deed in lieu or short sale would be implemented as an alternative solution. The company emphasized that foreclosure would always be considered as the last option.

It was previously announced that Bank of America would restart the foreclosure process through submission of indebtedness affidavits in judicial foreclosure states. Foreclosures would only proceed after release of court judgments. The bank has provided foreclosure lawyers with approval to pursue up to 16,000 foreclosure cases within the month alone.

Aside from the resumption of foreclosure activities, Bank of America has also committed to improve its foreclosure procedures to conform to only the best practices. The changes are aimed at earning confidence of mortgage investors, customers, and many other stakeholders.

Those improvements involve pre-foreclosure referrals, new affidavit forms, associate training programs, new code of conduct for foreclosing homes, and submission of affidavits in judicial foreclosure states. The bank also institutes improvements in its loan modification practices.

Under enhanced modification practices, the lender said it would assign one officer per loan modification account, develop customer status checklists for further explaining modification processes, and reassign up to 2,500 associates into homeownership retention support initiatives. Bank of America said it would also strive to always seek consensus with its mortgage investors, stakeholders, and policymakers when evaluating customers for possible loan modification.

Lastly, the bank said it is more committed now to help customers keep their homes. Up to 86% of Bank of America’s current customers are in mortgage. To date, the company has completed about 725,000 loan modification applications since January 2008.

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