B of A to resume foreclosures
Bank of America sign in Pasadena, Calif.
TEXT OF INTERVIEW
JEREMY HOBSON: The nation's largest bank by assets lost more than 7 billion dollars last quarter. Bank of America blames the loss on the cost of adjusting to new credit and debit card laws. The bank says things have actually improved when it comes to loan defaults. And it says foreclosures will go forward on more than 100,000 properties after they were halted a week ago. For more on that part of the story we're joined live by our own Mitchell Hartmann. Good morning, Mitchell.
MITCHELL HARTMAN: Good morning, Jeremy.
HOBSON: So why has Bank of America resumed foreclosures?
HARTMAN: Well, you'll remember that B of A, and also GMAC, which is another big mortgage servicer, are under scrutiny for having done these so-called "robo-filings." Having teams swoop in and sign hundreds of foreclosure documents a day, allegedly without reading them, sometimes not even knowing what was in them. B of A now says they've reviewed their process, found nothing amiss, and they'll resume, as you said, more than 100,000 foreclosures. This is in 23 states where a judge's approval is required. They're going state-by-state elsewhere in the country. GMAC also said it's slowly going to restarts the foreclosure process.
HOBSON: So the banks are making the case that everything is OK. Is everyone else going to be OK with that?
HARTMAN: Consumer advocates say that's hard to believe that they've done these reviews and everything is fine. Fifty state attorneys general have also announced a nationwide investigation. But Chris Whalen of Institutional Risk Analytics these foreclosure reviews don't matter very much in the final analysis.
CHRIS WHALEN: So people need to understand that in most cases the bank is going to win because they lent money and the borrower has defaulted. Whether or not the paperwork at the courthouse is in place doesn't really matter.
Now Whalen does say that Wall Street did "cut corners." That could spell continuing trouble for banks in the form of lawsuits and at least some foreclosures maybe being held up or even reversed by the courts.
HOBSON: OK. Thanks Mitchell. Marketplace's Mitchell Hartman.
HARTMAN: Thanks. You're welcome.