Bank of America suspends foreclosure proceedings in 23 states
J.P. Morgan Chase and Co.’s mortgage-servicing unit made a similar move on Wednesday, suspending foreclosures in the 23 states where they are handled through the courts, possibly affected more than 56,000 homeowners.
That follows an earlier announcement of two weeks ago that loans serviced by GMAC Home Mortgage Inc., a unit of Ally Financial Inc., also would be frozen.
The problem stems from issues with “robo-signers,” middle managers who sign affidavits allowing banks to repossess homes that are in default. Several have admitted in depositions that they signed off on thousands of foreclosures without fully reviewing the loan documents.
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