Bank of America admits foreclosure mess

Bank of America admits foreclosure mess

Bank of America has now for the first time admitted that it committed errors in processing foreclosure documents as its starts resubmitting some 102,000 case files.

It said mistakes were found in 10 out of 25 of the first batch of hundreds of foreclosure documents on Monday. Issues regarding erroneous entries, lack of signatures and incomplete documents were identified. There were also mismatches between property data and payment histories.

Bank of America claimed that most mistakes are minor and officials said they did not find proof of wrongful foreclosures.

The lender has so far examined just 1 percent of the number of documents it plans to resubmit to 23 states. It has been hit by allegations that it employed so-called “robo-signers” that did not examine documents properly before approving them.

Federal and state financial regulators started investigating the allegations of foreclosure fraud. Iowa’s attorney general and a few others said that the self-investigation made by lenders could not be fully trusted for lack of objectivity.

Top executives of lenders have issued statements that seek to clarify their mortgage processes.

“I don’t know how other companies do it, but in our company the affidavit signer and the reviewer are the same team member,” said John Stumpf, chief executive officer of Wells Fargo & Co. on October 20.

Then a deposition surfaced showing that Wells Fargo did in fact employed a robo-signer who did not perform verification steps.

“We don’t believe any of those cases or depositions should be taken out of context. If we find some errors and need for improvements we will take that action,” a spokesperson for Wells Fargo said.

Posted by James Fried on Monday October 25 2010, 8:44 AM EST. Ref: Wall Street Journal. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0