Today, Friday October 8, 2010 Bank of America announced that it plans to suspend foreclosure sales across the nation, as it reviews whether it handled its foreclosure procedures and documentation properly. This extends the mortgage foreclosure moratorium the Bank initiated in 23 states earlier this month. This moratorium began with other financial such as Ally Bank subsidiary GMAC Mortgage and JPMorgan Chase after it came to light that employees were signing off on foreclosure documents without verifying all the information contained in the documents that require court approval to foreclose on properties. It is anticipated that most major financial institutions will follow suit and suspend foreclosure proceedings at least temporarily. This may be good news for individuals in foreclosure and open a window of opportunity to continue modification or short sale transactions.
Illinois is among the 23 states included in the initial moratorium among these institutions. The states include: Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.
Ironically, a bill that would make it more difficult to challenge the legality of documents related to foreclosures has passed Congress and is awaiting President Barack Obama's signature.
The bill was passed through Congress with minimal debate, Reuters reported. It would require courts to accept as valid document notarizations made out of state, Reuters said. That would make it more difficult to challenge the authenticity of documents related to foreclosures.