Restart of Foreclosures By Banks Goes Slowly

Bank of America Corp. and J.P. Morgan Chase & Co. have hit snags in efforts to restart nearly 230,000 foreclosures across the U.S., meaning some cases are likely to remain in limbo until early next year.


Several complications are slowing the process, ranging from the hiring of new law firms to handle foreclosure paperwork to making sure that correct procedures are being followed as new or revised files are submitted in the 23 states where court approval is required for foreclosures.

The delays aren't a sign that documentation problems are worse than previously acknowledged by the nation's two largest banks by assets, according to the companies. And Bank of America, based in Charlotte, N.C., and J.P. Morgan, of New York, haven't backed down from their insistence that no one was wrongly foreclosed on as a result of errors in affidavits or other loan documents.

Still, Bank of America said it has refiled documentation on just a "handful" of foreclosures that must be approved by a judge. The bank previously said it would resubmit 102,000 affidavits on pending foreclosures starting Oct. 25, with foreclosure sales resuming in November.

James Mahoney, Bank of America's head of public policy, said "the process is now picking up," adding that "we expect there will be thousands of affidavits in the courts by the end of December." He wouldn't provide an estimate of how long it could take to go through all 102,000 cases being reviewed by employees.

The delay partly reflects a decision by Bank of America officials to make several visits to new law firms working on foreclosure cases for the bank to check that proper procedures are followed as new files are submitted to courts.

"We'll be opening the valve soon," another Bank of America executive said. "We're going to move slowly to ensure high quality."

J.P. Morgan said in November that it expected to start refiling foreclosure affidavits "within a couple of weeks." The bank temporarily suspended foreclosures in October.

However, "we still haven't quite started," a J.P. Morgan spokesman said. "We're making sure everything is right." Bank officials have said it will take three or four months to submit revised documentation on roughly 127,000 loans affected by the temporary halt.

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