By David Mildenberg
Oct. 18 (Bloomberg) -- Bank of America Corp., the largest U.S. bank by assets, said it will start resubmitting foreclosure affidavits next week in 102,000 cases in which judgment is pending. Shares of the company gained as much as 3.3 percent.
“As was the case for our judicial state review, our initial assessment findings show the basis for our foreclosure decisions is accurate,” spokesman Dan Frahm said in an e-mailed statement today.
Bank of America shares declined 9.1 percent last week, reaching their lowest level in more than a year, amid scrutiny of foreclosure practices and speculation that investors may force lenders to buy back faulty loans. The lender said Oct. 8 it would stop foreclosure sales nationally pending a review of its practices over the next few weeks.
Separately, Ally Financial Inc. spokeswoman Gina Proia said the company is processing foreclosures once it has reviewed the documents and corrected any errors. The lender halted evictions in 23 states on Sept. 17 and instituted a review for foreclosure documents.
“Today’s action by the banks is a political action more than anything else,” Meredith Whitney, founder of Meredith Whitney Advisory Group, said today in an interview at a financial conference in Naples, Florida.
Reviewing Cases
The cases Bank of America has reviewed so far affect foreclosures in 23 states that require judicial action before a home is seized, the bank said. Foreclosure sales will be delayed in the remaining 27 states until a review is completed state-by- state, Frahm said.
Fewer than 30,000 foreclosure sales will have been delayed during the review, Bank of America said. Costs stemming from the delays are “grossly distorted,” Barbara Desoer, president of the home-lending unit, said in an interview last week.
The scrutiny of foreclosure practices -- such as robo- signing, in which bank employees vouched for the accuracy of foreclosure affidavits without reading underlying records -- won’t cost as much as demands to repurchase loans, Whitney said. Future losses from repurchases of home loans will likely total $55 billion to $120 billion, JPMorgan Chase & Co. analysts led by John Sim and Ed Reardon wrote in a Oct. 15 report.
Bank of America gained 36 cents, or 3 percent, to $12.34 in New York Stock Exchange composite trading.
Article courtesy of Bloomberg
