October 8, 2010
The robo-signer issues at some of our country's largest and most important banks have taken another turn for the worse, unless of course you are a homeowner that is not making payments on your house. Bank of America (NYSE: BAC ) today announced that it will be halting foreclosures in all 50 states indefinitely until the issues are resolved.
Bank of America and JPMorgan (NYSE: JPM ) both announced last week a foreclosure freeze in 23 of the states that require court approval to foreclose upon homes. In court depositions, employees at both banks admitted to signing foreclosure documents without actually reading the foreclosure cases to make sure they are accurate. Bank of America employee Renee Hertzler said in a February deposition of foreclosure documents, "I typically don't read them because of the volume that we sign." She signed as many as 8,000 documents a month.
Some of the nation's other biggest lenders such as Wells Fargo (NYSE: WFC ) and Citigroup (NYSE: C ) are believed to have similar problems, but have not yet taken action, so investors should be wary until the situation is further investigated.
This latest news on the housing mess is another sign to investors that the housing market is still a long way from a significant recovery. I recommend staying clear of lenders with heavy mortgage exposure until this mess is figured out.