Bank of America Corp., the largest mortgage servicer who imposed a nationwide moratorium on foreclosures on Oct,. 1, announced it will restart foreclosures in 23 states on Monday.
Business As Usual
In the 23 states in which BofA restarts judicial foreclosures, it will attempt to seize 102,000 homes. The lender wants to further review its actions in California and 26 other states before it restarts foreclosures there. This will presumably happen after the midterm elections.
The numbers are staggering. Bank of America has over $54.6 billion of past-due mortgages in the foreclosure pipeline. Dan Frahm, a spokesman for the lender, said that nationwide about 195,000 BofA customers are more than full two years behind with payments.
Fit For The Guinness Book Of Records
Bank of America has the largest volume of bad mortgages among all. U.S. banks, with $74.9 billion all in all, including mortgages already foreclosed on and delinquent ones. With its whopping $68.6 billion, Wells Fargo is not far behind. The largest volume of mortgages currently in foreclosure or already foreclosed upon is on the books of JPMorgan Chase ($21.7 billion, plus another $43.4 billion in mortgages past due).
Citibank with its $6.3 billion worth of mortgages currently in foreclosure and $19.2 billion past-due (for a total of 25.6 billion) is, given the size of this lender, far less exposed.
“Although only some portion of the past-due loans will ultimately go into foreclosure, these figures tell us that the biggest players (…) could sink even deeper into the mortgage mayhem,”
said Martin D. Weiss, chairman of Weiss Ratings.
Banks Will Press Ahead
Until robo-foreclosures saw the light of day and attracted well-deserved media scrutiny, banks used to pretend they were using sound procedures and solid evidence. Now the genie is out of the bottle. Quite a few major financial institutions such as Bank of America, Wells Fargo, J. P. Morgan Chase and GMAC Mortgage had to admit to major mistakes if not downright fraud. They are unapologetic even though they appear to have realized that sloppy and shoddy robo-foreclosures may only increase legal scrutiny, federal oversight and–last but not least–they also make investors nervous. So they are “reviewing” their procedures and streamlining their foreclosure operations.
But don’t expect them to stop foreclosing.
Where Are The Loan Modifications?
The White House has been opposed to a nationwide moratorium on foreclosures even as we approach the midterm elections. Any meaningful involvement of federal regulators will be even less likely after the votes are cast. Since the regulators are reluctant to act, banks will press ahead relentlessly. It is far from certain, however, whether this is the best outcome for the economy.
Most lenders have displayed a stubborn reluctance towards loan modifications, which would be presumably more time-consuming than robo-signing foreclosure documents on an assembly line. This, in turn, has served to convince many borrowers that making payments is a waste of money. You can’t really blame them.