Bank of America halts foreclosures in 23 states

By Hibah Yousuf, staff reporter October 1, 2010: 7:12 PM ET

NEW YORK (CNNMoney.com) -- Bank of America is the latest in a string of banks to freeze home foreclosures in 23 states as it investigates whether there were flaws in its process.


"We have been assessing our existing processes," Bank of America said in a statement. "To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment in the 23 states where courts have jurisdiction over foreclosures."

Bank of America did not have an estimate of the number of homeowners that will be affected by the delayed process.

The announcement comes two days after JP Morgan Chase said it will also halt foreclosures for about 56,000 homeowners after learning that its employees may have approved foreclosures without personally reviewing loan files.

A Chase spokesman said it is working with outside counsel over the next few weeks to review its process to confirm that it meets the appropriate standards.

Last week, Ally Financial, previously known as GMAC, the finance arm of General Motors, said it will also pause foreclosures in the 23 states.

Mortgage lender Freddie Mac said Friday that it is "deeply concerned" with the recent reports and said the alleged practices are not in compliance with its guidelines.

"We expect to provide instructions to our servicers later today that are intended to ensure that their foreclosure processes are in compliance with state law and Freddie Mac's servicing requirements," the lender said in a statement. "It's essential that the industry work together to protect borrowers' rights and ensure the integrity of the foreclosure process."