Echoing recent similar actions by a couple of its major home mortgage rivals, Bank of America announced yesterday that it would suspend final foreclosure actions (the actual foreclosing and subsequent eviction of occupants) for the time being in a number of its areas of operation around the country. They are taking this action in states where foreclosure is handled by judicial action only. This means that if you are not located in a state where such form of foreclosure is an option, you fall outside this moratorium by BofA. There are 27 states that do not have judicial action as a form of foreclosure, including California. But, there ARE 23 states that do have this option, so you may have some good fortune here.
The reason for this action by the bank is in cases of BofA having difficulty verifying it has the legal and documentary right to foreclose on a particular property, it wants the ability to locate and verify it has legal rights of foreclosure backed by the appropriate related documents before proceeding on these foreclosures. This has increasingly become an issue in many areas of the nation not only for BofA, but for many other lenders as increased numbers of loans were sold and resold in various parts of the secondary and/or securitized markets.
Advice to the homeowner potentially facing foreclosure, regardless whether your loan was made by BofA or not, be prepared to challenge the action by the bank by forcing them to produce the relevant mortgage docs (promissory note and/or loan agreement). No docs from the bank may mean no foreclosure, or at least a long delay while they attempt to locate them.
Good luck!
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