Bank of America suspends Maine foreclosures

26 November 2010

Bank of America (BofA) has agreed to offer some US homeowners threatened with foreclosures a temporary reprieve over the Thanksgiving holiday period, after it announced it was suspending ongoing legal actions.

Maine attorney general Janet Mills announced this week that she had struck a deal with BofA and Ally Financial subsidiary GMAC Mortgages to delay any decision on pending cases until a report on BoA's foreclosure procedures has been submitted.

"My office is receiving calls every day from homeowners," Ms Mills stated. "My office will continue to insist that the banks devote more resources to loan modifications."

GMAC also signalled its intention to put the brakes on sales of foreclosed properties until it has reached an agreement with the attorney-general over its own methods and the state has implied it could yet join a class action lawsuit against both firms.

It is estimated that just under 100 homes will be affected by the delay and Ms Mills stressed that families should continue to attempt to renegotiate their agreements, urging even those who have fallen behind on payments not to abandon hope.

According to the Portland Press Herald, GMAC has launched 1,156 foreclosures in Maine over the last five years and has recently been accused of "robo-signing" - using machines to put signatures to affidavits in a bit to speed up the process.

BofA spokesman Bill Haldin declined to make any comment on the report, but Ally Financial representative James Olecki said the group had held "constructive discussions" with Ms Mills' office in recent weeks.

In October, Maine Bureau of Consumer Credit Protection superintendent William Lund commented that the state had grown increasingly concerned about the "unusually high level" of foreclosure activity witnessed in the preceding months.

Last week, CitiMortgage managing director Harold Lewis told a congressional committee that his firm may have to refile thousands of foreclosure cases executed prior to an internal review.

By Gary Cooper

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