Big news for Chang & Diamond's Bankruptcy clients!
According to almost all news websites (that care to report about our nations housing crisis) Bank of America along with several other large lenders have halted their foreclosure processes for the time being.
The reason these large lender came to a screeching halt is to prove that there have been no illegal foreclosures. In 23 states a Judge is required to approve a foreclosure before the home is taken back or sold at auction. At a legal proceeding in February a Bank of America official stated that she signed up to 8,000 foreclosure documents a month without reading them. Making it unclear if a Judge had signed off. There are also rumors of Trustee Sale Companies forging debtors signatures and notarizing documents in house to speed up the foreclosure process.
Bank of America, and the others, contend that nothing has been amiss, but they want to take a month or so to prove it. Lenders acknowledge that they are constantly under fire since our housing marking fell through the floors in the last few years. In response to Consumer/Debtors/Voters concerns that some may have been evicted unlawfully, Spokesperson for Bank of America, Dan Frahm, said "we feel the need to address that and demonstrate that our process is accurate". Bank of America also stated that although they are among the first to go back and double check their work, this practice may soon be required for all lenders.
This is good news for a couple reasons. First, this will give some of our clients additional time to work out their finances. If we were filing a Chapter 13 to keep a person out of foreclosure, we could now look at Chapter 7 as an option. Also, this will keep our fragile Southern California housing market from becoming even more saturated with bank owned homes that nobody wants. The UT reported that "During the first half of this year, there were 5,458 notices of default in San Diego County and 3,315 foreclosures, according to MDA DataQuick, a real estate analysis firm based in La Jolla." Perhaps this will help get those numbers down also. The last silver lining that I see is that these big lenders seem to be taking more responsibility for their actions. That seems like a step in the right direction.
Call us today if this news may effect your bankruptcy. 619-233-6300
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