WASHINGTON — The pace of U.S. home foreclosures may not slow much after all.
Bank of America said Monday that it plans to resume seizing more than 100,000 homes in 23 states next week. It said it has a legal right to foreclose despite accusations that documents used in the process were flawed.
Other major leaders have yet to say whether they will follow suit and resume foreclosures in the states that require a judge’s approval. But analysts expect the move by the nation’s biggest bank will give way to an industrywide effort to push ahead with a wave of foreclosures that have depressed the housing market.
Banking analyst Nancy Bush of NAB Research said other lenders are likely to follow because foreclosure practices were similar from bank to bank.
“We’ll be back to square one by the end of the year,” she said.
The bank’s move could mean that the costs of the foreclosure document mess will wind up being less than some investors had feared just days ago. Bank shares sank last week after JPMorgan Chase & Co. said it set aside $1.3 billion in the third quarter to cover legal expenses that include the foreclosure problems.
Bank of America Corp. says it’s confident of its foreclosure decisions in a majority of its questionable cases. The bank is still delaying foreclosures in the 27 other states, which don’t require a judge’s approval.
Its move comes two weeks after the bank began halting foreclosures nationwide amid allegations that bank employees signed but didn’t read documents that may have contained errors.
“The basis for our foreclosure decisions is accurate,” said Dan Frahm, a Bank of America spokesman.
The company said it plans to resubmit documents with new signatures in the 23 states that require a judge’s approval to restart the foreclosure process.
Bank of America was the only lender to halt foreclosures in all 50 states. Other companies, including Ally Financial Inc.’s GMAC Mortgage unit, PNC Financial Services Inc. and JPMorgan, have halted tens of thousands of foreclosures after similar practices became public.
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