The Wall Street Journal reported today that GMAC and Bank of America restarted foreclosures that were previously frozen because of document concerns (Click here to read the full article).
The Journal reports that Bank of America has reopened more than 100,000 foreclosure actions because it “had found no significant problems in its procedures for seizing homes.” The Journal goes on to report that restarting foreclosure proceedings is part of “a counterattack by lenders to stem a financial and political threat over allegations that certain employees signed hundreds of documents a day without carefully reviewing their contents when foreclosing homes.”
Personally, I am surprised that the banks did not wait until after the November elections. Voter anger against mortgage companies is going through the roof. Restarting foreclosure proceedings only stokes the fire of that anger.
Just this morning, I spoke to some Rome GA bankruptcy clients at their court hearing who are absolutely furious with their mortgage company (for the record, please note that their mortgage company is not GMAC or Bank of America). In their case, the mortgage company offered them a loan modification trial period. For six months, their mortgage payment was cut in half. At the end of the six month period, the mortgage company notified them that they were denied a loan modification. To make matters even worse, the mortgage company demanded that the client immediately make up for the half payments. When the clients could not come up with all the money at once, foreclosure proceedings were started. These clients felt like they were set up. They feel angry and betrayed. I have spoken to may other Georgia bankruptcy clients in the past few months who feel the same way.
In this election season, I have no doubt that many Georgia politicians are going to tap into this voter anger just before the November elections by promising to stick it to those nasty mortgage companies.