By Joe Rauch and Dave Clarke
CHARLOTTE, N.C./BOSTON, Oct 18 (Reuters) - Bank of America said it was partially lifting its nationwide freeze on foreclosures even as regulators pressed their probes of major banks to determine whether shoddy practices caused some people to be illegally kicked out of their homes.
The move by Bank of America, the largest mortgage servicer, could buoy investor hopes for an easing in the foreclosure documents crisis seen threatening bank earnings and the health of the fragile housing market.
At issue are allegations that banks failed to review foreclosure documents properly or submitted false statements when they foreclosed on properties.
Banks could face fines and lawsuits, and may be forced to repurchase faulty loans.
Bank of America, which imposed moratoriums along with some other banks earlier this month as the foreclosure crisis grew, said it would resume foreclosures in state courts in 23 states on Oct. 25, after having reviewed its procedures and decided they were sound.
Bank of America is due to release its quarterly financial results on Tuesday, and faces a likely barrage of questions from Wall Street analysts about foreclosures.
'This is a sign they're feeling relatively confident,' said Jefferson Harralson, a Keefe, Bruyette & Woods Inc bank analyst.
Foreclosure sales will resume in states where a judge's approval is required, when the bank begins refiling amended affidavits on 102,000 foreclosures, Bank of America said.
In the other 27 states, where a judge's approval is not needed, the bank will continuing its reviews for an undetermined period, but expects fewer than 30,000 foreclosures sales will be delayed as part of this temporary halt.
'As was the case for our judicial state review, our initial assessment findings show the basis for our foreclosure decisions is accurate,' said BofA spokesman Dan Frahm.
John Walsh, acting director of the Office of the Comptroller of the Currency, said earlier on Monday that interagency teams had been dispatched to U.S. banks to check on whether any homeowners had been harmed by foreclosure procedures.
He spoke as investor concerns appeared to ease over the potential exposure of the financial sector to foreclosure problems that rattled the markets last week.
Banks are accused of using 'robo-signers' to sign hundreds of foreclosure documents a day, reigniting public anger with an industry blamed for helping cause the 2007-2009 financial crisis and resented for getting billions of dollars in taxpayer aid.
CITIGROUP CHEERS INVESTORS
U.S. stocks rose on Monday, led by gains in financial shares, as Citigroup reported stronger-than-expected profits.
Citigroup, which has declined to place a temporary moratorium on foreclosures, said it is 'fairly confident' in its procedures. It saw its results boosted by slowing credit losses and reduced reserves for bad loans.
'The financials last week were getting hammered over questions over foreclosure proceedings ... now it doesn't seem to be as all-encompassing,' said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.
OCC's Walsh, whose office oversees large national banks, told reporters after a speech in Boston that teams from his agency, the Federal Reserve and the Federal Deposit Insurance Corp were working together.
Attorneys general in all 50 U.S. states have launched their own probe and the U.S. Justice Department and the Securities and Exchange Commission are also investigating.
Atlanta Federal Reserve Bank President Dennis Lockhart said on Monday that the U.S. central bank was examining mortgage servicers in an effort to get a better sense of the extent of foreclosure documentation problems around the nation.
'We're doing quite a bit,' Lockhart told reporters after a speech in Savannah, Georgia. 'We're doing ad hoc exams of the major mortgage servicing institutions as well as other banks that have a significant servicing flow.'
The White House, despite congressional election-year pressures, has refrained from joining calls for a nationwide moratorium on foreclosures.
(Additional reporting by Caroline Valetkevitch in New York, Pedro Nicolaci da Costa in Savannah, Corbett B. Daly in Washington; Writing by Matt Spetalnick;Editing by Tim Dobbyn) Keywords: thd USA FORECLOSURES/ (matt.spetalnick@reuters.com ; +1 202 898 8300; Reuters Messaging: matt.spetalnick.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
CHARLOTTE, N.C./BOSTON, Oct 18 (Reuters) - Bank of America said it was partially lifting its nationwide freeze on foreclosures even as regulators pressed their probes of major banks to determine whether shoddy practices caused some people to be illegally kicked out of their homes.
The move by Bank of America, the largest mortgage servicer, could buoy investor hopes for an easing in the foreclosure documents crisis seen threatening bank earnings and the health of the fragile housing market.
At issue are allegations that banks failed to review foreclosure documents properly or submitted false statements when they foreclosed on properties.
Banks could face fines and lawsuits, and may be forced to repurchase faulty loans.
Bank of America, which imposed moratoriums along with some other banks earlier this month as the foreclosure crisis grew, said it would resume foreclosures in state courts in 23 states on Oct. 25, after having reviewed its procedures and decided they were sound.
Bank of America is due to release its quarterly financial results on Tuesday, and faces a likely barrage of questions from Wall Street analysts about foreclosures.
'This is a sign they're feeling relatively confident,' said Jefferson Harralson, a Keefe, Bruyette & Woods Inc bank analyst.
Foreclosure sales will resume in states where a judge's approval is required, when the bank begins refiling amended affidavits on 102,000 foreclosures, Bank of America said.
In the other 27 states, where a judge's approval is not needed, the bank will continuing its reviews for an undetermined period, but expects fewer than 30,000 foreclosures sales will be delayed as part of this temporary halt.
'As was the case for our judicial state review, our initial assessment findings show the basis for our foreclosure decisions is accurate,' said BofA spokesman Dan Frahm.
John Walsh, acting director of the Office of the Comptroller of the Currency, said earlier on Monday that interagency teams had been dispatched to U.S. banks to check on whether any homeowners had been harmed by foreclosure procedures.
He spoke as investor concerns appeared to ease over the potential exposure of the financial sector to foreclosure problems that rattled the markets last week.
Banks are accused of using 'robo-signers' to sign hundreds of foreclosure documents a day, reigniting public anger with an industry blamed for helping cause the 2007-2009 financial crisis and resented for getting billions of dollars in taxpayer aid.
CITIGROUP CHEERS INVESTORS
U.S. stocks rose on Monday, led by gains in financial shares, as Citigroup reported stronger-than-expected profits.
Citigroup, which has declined to place a temporary moratorium on foreclosures, said it is 'fairly confident' in its procedures. It saw its results boosted by slowing credit losses and reduced reserves for bad loans.
'The financials last week were getting hammered over questions over foreclosure proceedings ... now it doesn't seem to be as all-encompassing,' said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.
OCC's Walsh, whose office oversees large national banks, told reporters after a speech in Boston that teams from his agency, the Federal Reserve and the Federal Deposit Insurance Corp were working together.
Attorneys general in all 50 U.S. states have launched their own probe and the U.S. Justice Department and the Securities and Exchange Commission are also investigating.
Atlanta Federal Reserve Bank President Dennis Lockhart said on Monday that the U.S. central bank was examining mortgage servicers in an effort to get a better sense of the extent of foreclosure documentation problems around the nation.
'We're doing quite a bit,' Lockhart told reporters after a speech in Savannah, Georgia. 'We're doing ad hoc exams of the major mortgage servicing institutions as well as other banks that have a significant servicing flow.'
The White House, despite congressional election-year pressures, has refrained from joining calls for a nationwide moratorium on foreclosures.
(Additional reporting by Caroline Valetkevitch in New York, Pedro Nicolaci da Costa in Savannah, Corbett B. Daly in Washington; Writing by Matt Spetalnick;Editing by Tim Dobbyn) Keywords: thd USA FORECLOSURES/ (matt.spetalnick@reuters.com ; +1 202 898 8300; Reuters Messaging: matt.spetalnick.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.