Bank of America (NYSE: BAC) has been embroiled in a foreclosure mess for nearly two months. Multiple State Attorney Generals have filed suits or are currently preparing legislative action aimed at the foreclosure process and question their tactics. Today, the latest state to jump on the band wagon became Maine.
Maine Attorney General Janet T. Mills said Bank of America agreed it won’t complete foreclosures in Maine and Ally Financial’s GMAC Mortgage unit said it will halt sales of foreclosed homes in the state. Bank of America will not “proceed to judgment on any pending matters” in Maine until it has finished an internal review of its foreclosure procedures and reported the findings to Mills, the state attorney general said today in a statement on her website. GMAC agreed to temporarily halt sales of foreclosed homes until the end of negotiations in an attempt to resolve Mills’ concerns about the company’s foreclosure procedures, according to the statement.
With many states suffering in the wave of foreclosures as ARM rates reset and unemployment rates rise, the mortgage lenders are under more scrutiny then ever. All 50 U.S. states are investigating whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. The probe, announced Oct. 13, came after JPMorgan Chase & Co. and GMAC said they would stop repossessions in 23 states where courts supervise home seizures and Bank of America, the largest U.S. lender, froze foreclosures nationwide.
Mills said in today’s statement “My office is receiving calls every day from homeowners who complain that the bank lost the paperwork and that they are unable to speak with the same person twice about their loan. My office will continue to insist that the banks devote more resources to loan modifications and to streamlining their modification processes. I advise consumers to be persistent, to contact a HUD certified counselor and to document attempted contacts with their lender.”
Jim Olecki, a spokesman for Ally Financial said in an emailed statement “GMAC Mortgage has had constructive discussions with the Maine Attorney General related to foreclosure matters in that state. We have no further comment at this time.”
