Bank of America to resume Colorado foreclosure sales soon

Date: Oct. 21st, 2010
Contact: Aldo Svaldi at tje Denver Post Phone: 303-954-1410

Bank of America plans to resume foreclosure sales in Colorado soon — not exactly the news that borrowers needing a longer reprieve may want to hear.

"We have been getting several calls from homeowners about what do they do at this point, what actions do they take," said Stephanie Riggi, manager of Colorado Foreclosure Hotline.

The advice has generally been to expect the clock to start ticking again in early November and prepare accordingly.

Bank of America said on Oct. 8 that it would halt foreclosure sales in all 50 states to review its procedures following allegations that foreclosures weren't being processed properly.

Bank of America, which owns Countrywide, services or collects payments for one of every five U.S. mortgages, giving its actions a huge weight.

About 32 percent of the calls handled through the Colorado Foreclosure Hotline involve loans from Bank of America, the largest of any mortgage firm operating in the state.

Foreclosure counselors said they never expected the postponement to last for long, unless deeper problems were discovered.

But for some borrowers, the few extra weeks did provide enough time to prevent the loss of a home to foreclosure, said Zachary Urban, director of housing counseling with the Adams County Housing Authority.

"To give borrowers and lenders more time to work things out means fewer foreclosures, period," Urban said.

Bank of America announced Monday that it would start scheduling foreclosure sales again in the 23 states where judges oversee the process, which does not include Colorado.

"Our foreclosure review found that the underlying facts behind the foreclosure sales are accurate," said Jumana Bauwens, a spokeswoman for Bank of America Home Loans.

The bank said that assessment applies to states such as Colorado that use a trustee instead of a judge.

Judicial states restarted sooner because loan reviews there had been underway longer, said Bauwens.

Future announcements could come on a state-by-state basis rather than in one big block, she said.

Colorado's public trustees, who have seen the number of sales slow with Bank of America's halt, are preparing for foreclosure sales to heat up again after the Nov. 2 elections.

But Bauwens said the backlog won't move all at once.

"It will be a slow progression of foreclosures moving through the system," she said.

State and federal investigations into how foreclosures are handled, however, could bring greater protections for consumers.

Attorneys general in all 50 states and the District of Columbia, along with the Federal Housing Administration and Financial Fraud Enforcement Task Force, are looking into whether foreclosures are being processed according to the letter of the law.

The investigations may reveal deeper problems in the ownership of mortgages, which in theory could trigger a longer postponement or an outright moratorium on foreclosure sales.

But for now, counselors are advising consumers not to count on it.

"We think it is important that this legal contract issue get resolved and the servicers figure it out and quick," said Shannon Peer, manager of housing counselors at Brothers Redevelopment in Denver.

But borrowers sign an agreement agreeing to pay, Peer said, something that confusion over the ownership of a loan or how a foreclosure is processed doesn't remove.

Colorado's foreclosure process protects the borrower in the event that the lender foreclosing doesn't have the proper title to the property, said Jan Zavislan, deputy attorney general for consumer protection.

Zavislan and his staff are hoping to talk to all major lenders in the state and are gathering complaints from consumers online at the website

"We want to come to some level of comfort of guarantee that these foreclosures are being handled properly," he said.

Denver attorney John Head, who represents borrowers in litigation with their lenders, said cases of people losing their homes despite making proper payment are extremely rare.

A much bigger concern are borrowers who think they are obtaining a mortgage modification designed to keep them in their homes, only to find out lenders are still moving forward with foreclosure.

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