Bank of America Extends Foreclosure Freeze Nationwide

GMAC, JPMorgan Chase, Bank of America and now Litton Loan Servicing have suspended the mortgage foreclosure process in countless states, Bank of America now extending its freeze nationwide.

Attorney generals in various states, as well as lawyers working on class action suits, are alleging countless details of possible mortgage fraud including faked Social Security numbers, phantom titles, forged documents, “robo-signers” who did not look at the cases, and mortgages sold so many times that nobody really knows who owns them. In short, the shoddy paperwork banks have used to evict homeowners has been unclear, haphazard, inaccurate and just plain incompetent. The banking giants in the midst of the dilemma insist that there was no fraud in most of the frozen cases and that the foreclosures are justified. They insist that while there may be delays, the outcomes will be the same.

On October 1 the title insurer Old Republic National, which provides protection to the homebuyer and mortgage provider in case of questionable ownership – stopped offering policies on foreclosed properties owned by JPMorgan Chase and GMAC. Stewart Title, another title insurer, has since then also made it extremely difficult to write a policy for any foreclosure property connected to any of the banks now experiencing problems.

As a result of all this, the banks will have to review the paperwork for hundreds of thousands of mortgages. Since housing has pulled the economy out of recession in the past seven recessions, this is a terrible blow to the nation. Experts believe the foreclosure scandal might lengthen the housing depression for at least another few years instead of few months.