Federal officials continue looking into foreclosure problems

Bank of America had halted foreclosures in all 50 states while it looked into problems. So far, bank officials say they haven’t found any cases so far that were in error and shouldn’t have gone through.

The Obama administration hasn’t called for a nationwide moratorium on foreclosures because of concern that halting repossessions would further stall the sluggish housing market. 

The Federal Housing Finance Agency outlined a plan last week requiring mortgage lenders to follow certain procedures while investigating whether foreclosures were done properly and included the necessary documentation. 

Officials in 50 states launched a joint probe into possible problems with home foreclosure paperwork. 

States attorneys general have expressed concern that affidavits and other documents have been signed by people who didn’t have personal knowledge of the facts in the documents and were signed outside of the presence of a notary public, contrary to state law.

Concerns have been raised recently about potential problems with the foreclosure process because of “robo-signings” where hundreds of documents a day were signed but the accuracy of the paperwork wasn’t checked. 

Foreclosures hit a record high in September and banks repossessed a record number of properties during the past three months — 288,345 — an increase of 7 percent from the previous quarter and an increase of 22 percent from the third quarter of 2009, according to a report by RealtyTrac Inc., a foreclosure listing service. 

Foreclosure activity in the 24 states where courts are involved in the proceedings accounted for 40 percent of all foreclosure activity in the third quarter and 36 percent of bank repossessions, according to the report.

Foreclosure sales in September represented 31 percent of all sales during the month, while repossessed houses alone accounted for 18 percent.