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Monday, October 11, 2010 6:16 PM ET
Banks freezing foreclosures
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GMAC Mortgage LLCFort Washington, Pennsylvania
Ally Financial Inc. (ALLY-US)$ 20.40
0.39%
Bank of America Corp. (BAC-US)$ 23.09
0.61%
Last Updated: 12/9/2016
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Industry Document: Bank Holding Companies with the Most 1-4 Family Loans in Fore... 10/12/2010
About This Feature
Data feature produced by SNL's research groups in cooperation with the news department, leverages SNL's unrivaled data resources to highlight emerging trends and topics of interest.

Many banks are facing foreclosure moratoriums or have already frozen their foreclosure activities amid rising concern about foreclosure practices.

The disruption comes at a bad time, particularly to the extent that affected institutions are trying to work through the fallout of the real estate collapse and nonperforming assets remaining on their balance sheets. According to SNL data, Barclays Group US Inc., Ally Financial Inc. and New York Private Bank & Trust Corp. were among the banks with the highest percentage of their one- to four-family loans in the foreclosure process.

Goldman Sachs Group Inc. unit Litton Loan Servicing LP joined Bank of America Corp. on the list of high-profile financial companies making changes to their foreclosure procedures Oct. 8. While the Goldman unit was said to have suspended only some foreclosures, BofA said it would delay its foreclosure proceedings and sales in all 50 states. The bank has $18.77 billion in one- to four-family loans in foreclosure, representing about 4.39% of its loans in the segment. It also has about $87.94 billion in one- to four-family loans that it services for others that are in foreclosure. BofA had previously suspended foreclosures in 23 states but decided to expand the moratorium across all 50 states.

The move follows recent escalations of concern about bank foreclosure practices following revelations among a number of larger banks that some employees were not properly reviewing borrowers' loan files before moving ahead with foreclosure proceedings.

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Connecticut Attorney General Richard Blumenthal asked the state's Judicial Department last week to freeze foreclosures in the state for 60 days, and Ohio's attorney general has filed a lawsuit against Ally Financial and GMAC Mortgage LLC over foreclosure abuses.

In Washington, politicians from both sides of the aisle have involved themselves in the controversy. Senate Majority Leader Harry Reid, D-Nev., sent a letter to the largest mortgage servicers operating in his state, demanding they suspend foreclosure proceedings after the revelations of abuse at many companies. Sen. Richard Shelby, R-Ala., the senior member of the GOP for the Senate's Committee on Banking, Housing and Urban Affairs, has said he would like to see an investigation into alleged improper practices at a number of institutions.

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Banks could be beginning to feel pressure from other areas as well. Old Republic National Title Insurance Co. said Oct. 4 that it has instructed its agents not to write insurance policies on homes foreclosed by JPMorgan Chase & Co. because of concerns about its practices. The bank has about $19.50 billion in one- to four-family loans in foreclosures, about 7.50% of its total, and services another $54.48 billion of one- to four-family loans in foreclosure for other companies. The bank has suspended its ongoing foreclosures.

 

Click here to access an SNLxL template of the above tables.

 

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