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BofA joins others in foreclosure freeze

Oct. 2, 2010 at 8:06 AM
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NEW YORK, Oct. 2 (UPI) -- U.S. banking giant Bank of America said it would join other lenders in freezing its foreclosure actions, amid growing concern over paperwork issues.

In Connecticut, Attorney General Richard Blumenthal asked the courts to impose a 60-day moratorium on all foreclosures, as Bank of America's announcement makes it the third large lender in the past two weeks, after GMAC Mortgage and JPMorgan Chase, to discontinue its pursuit of foreclosures.

Bank of America said it would review its paperwork and, in time, resubmit its filings, The New York Times reported Saturday.

The bank did not say how long that would take. Like GMAC, Bank of America did not say how many foreclosure cases would be affected by the freeze. JPMorgan Chase said it was reviewing 56,000 cases.

Blumenthal, who is running for a seat in the U.S. Senate, said a foreclosure moratorium would "stop a foreclosure steamroller based on defective documents."

Critics pointed out that banks are processing huge numbers of foreclosures, but doing so with an eye on their own budgets.

Economist Thomas Lawler of Lawler Economic & Housing Consulting, said, "The foreclosure crisis is now almost three years old, and not having staffed up sufficiently to deal with the problems with inadequate staffing borders on criminal."

"I mean, jeepers, look at the unemployment rate. How hard would it be to hire more folks?" he said.

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