A major Charlotte bank says it will no longer sell foreclosed homes after finding it may have been using a flawed process to do so.
Bank of America announced Friday that it would stop its sales of foreclosed homes in all 50 states. The Charlotte bank said it wants to review documents it uses to process the foreclosures. The announcement came after heavy pressure from state and federal officials about whether banks properly reviewed the paperwork before signing off on it.
Charlotte-based Bank of America is the nation’s largest bank and the first to stop all of its foreclosures nationwide. In a statement Friday, company spokesman Dan Frahm said the bank was hoping to avoid mistakes that could potentially displace homeowners:
We will stop the foreclosure sales until our assesment has been satisfactorily completed. Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.
The company did not say how many homes would be affected.
A document obtained last week by the Associated Press showed a Bank of America official admitting that she signed at least 7,000 foreclosure documents a month and typically didn’t read them.
Bank of America originally said it would only stop sales in the 23 states that required judges to review foreclosures, including South Carolina. However, Friday’s announcement extended the hold to all 50 states.
US Representative Barney Frank, a member of the Senate’s Banking Committee, said Friday the committee would hold a hearing on the issue.