Bank of America to thaw its freeze on foreclosures

WASHINGTON - The pace of U.S. home foreclosures may not slow much after all.

Bank of America Corp. said Monday that it plans to resume next week seizing more than 100,000 homes in 23 states, including Pennsylvania and New Jersey, that require approval of foreclosures by a judge. It said it has a legal right to foreclose despite accusations that documents used in the process were flawed.

Bank of America is based in Charlotte, N.C.; in the Philadelphia market, it ranks as the fifth-largest bank, with 6 percent of the area's deposits.

Bank of America shares declined 9.1 percent last week to their lowest in more than a year, amid scrutiny of foreclosure practices and speculation that investors may force it and other lenders to buy back faulty loans. Bank of America said Oct. 8 it would stop foreclosure sales nationally pending a review of its practices.

After Monday's announcement, its shares rose 36 cents to close at $12.34.

It's not yet clear if other major lenders will follow suit and resume foreclosures in the states that require a judge's approval. But the move by the nation's biggest bank could give way to an industry-wide effort to push ahead with a wave of foreclosures that have depressed the housing market.

Bank of America said it was confident of its foreclosure decisions in most of the questionable cases. The bank still is delaying foreclosures in the 27 other states that don't require a judge's approval.

Its move comes two weeks after the bank began halting foreclosures nationwide amid allegations that bank employees signed but didn't read documents that may have contained errors.

"The basis for our foreclosure decisions is accurate," Dan Frahm, a Bank of America spokesman, said in announcing the resumption.

The company said it would resubmit documents with new signatures in the 23 states requiring a judge's approval to restart the foreclosure process. It will delay fewer than 30,000 foreclosures.

It was the only bank that stopped foreclosures nationwide. Other companies, including Ally Financial Inc.'s GMAC Mortgage unit, PNC Financial Services Inc. and JPMorgan Chase & Co., have halted tens of thousands of foreclosures on a more limited scale after similar practices became public.

Analysts at FBR Capital Markets said in a note to clients that the bank's announcement demonstrates that the issue may be "overblown."