Bank of America, which is gearing to resume foreclosures as soon as today, has just confirmed that it has "discovered errors in 10 to 25 out of the first several hundred foreclosure cases it examined starting last Monday." Assuming a nice round number of 500 or so tested cases, this means a faulty incidence rate of up to 4%. Considering that the bank has about 102,000 cases it is preparing to resume foreclosing on, this could mean that as much as 4,500 cases are about to put back. And who knows what else Bank of America is lying about?
More from WSJ:
Some of the defects seem relatively minor, according to the bank, and bank officials said they haven't uncovered any evidence of wrongful foreclosures. There was an address missing one of five digits, misspellings of borrowers' names, a transposition of a first and last name and a missing signature on one document "underlying" an affidavit, a bank spokesman said.
But the bank uncovered these mistakes while preparing less than 1% of the first foreclosure files that it intends to resubmit to the courts in 23 states. As the nation's largest mortgage lender, the bank is under pressure to show that its mortgage process isn't flawed amid revelations that many banks used "robo-signers" to approve large numbers of foreclosure documents without reading them closely.
Here is how BofA is backtracking out of its original lie that all was well:
Bank of America in several recent public comments about the foreclosure issue hadn't previously acknowledged even minor errors. Yet last week it uncovered a group of mistakes as it prepared to resubmit the first batch of documents and shared the information internally, according to people familiar with the matter. Executives are briefed twice daily about what was found.
When the bank announced Oct. 18 that it would lift a freeze on foreclosure sales in 23 states, it emphasized the accuracy of its internal review. "Our initial assessment findings show the basis for our foreclosure decisions is accurate," the company said in a statement.
In other words, criminally negligent until proven criminal with intent.
Elsewhere, Wells Fargo continues to pretend it sees no evil, sign no roboevil, even though it has already been caught redhanded after a sworn deposition by a robosigner confirmed the bank engaged in comparable practices. Of course, the downside there is pretty bad for one Warren Buffett, so expect only a full-blown subpoena coupled with a Cease and Desist order, most likely from the Ohia AG, to do something about the bank changing its criminal ways.
Several statements from bank officers about foreclosure practices have come under scrutiny. Wells Fargo & Co. Chief Executive John Stumpf on Oct. 20 said: "I don't know how other companies do it, but in our company the affidavit signer and the reviewer are the same team member." Days later a deposition emerged from a bankruptcy case indicating that Wells Fargo had in fact used a robo-signer who didn't verify documents she approved.
A Wells Fargo spokeswoman said "we don't believe any of those cases or depositions should be taken out of context. If we find some errors and need for improvements we will take that action."
Regardless, we expect the foreclosure "resumption" by BofA to be postponed indefinitely at this point, especially with both Gross and Dudley now involved, and others like Bill Black calling for the full nationalization of the bank based on years of unmitigated criminal activity. And yes, the plaintiff bar is about to release a full blown onslaught against the TBTFs.