Questions about debts or bankruptcy? Call Doug Beaton, a local specialist in American bankruptcy law.

On Friday, Bank of America became the first major US bank to suspend foreclosure sales in all 50 states after questions were raised about whether it and other banks had illegally seized homes without the proper documentation. In a deposition filed in a Massachusetts lawsuit, a Bank of America official said she signed as many as 8,000 foreclosure documents a month, usually without reading them, a process known as ‘‘robo-signing.’’

Bank of America’s spokesman said he could not give any details about the problems with the foreclosure process, or say when sales of foreclosed homes would resume, until after the bank finishes checking the paperwork for all pending foreclosures.

Two other major lenders, GMAC and JP Morgan Chase, have also halted foreclosures in many states, but not yet in Massachusetts or New Hampshire.

Oher banks,such as Wells Fargo & Co., have declined to halt their foreclosures.

Meanwhile, the Boston Globe received some acerbic comments on their editorial page concerning the situation:

“Former hair stylists, factory workers and Wal-Mart greeters are among the bank-designated ‘foreclosure experts’ at the heart of the current paperwork fiasco that’s wrapping the housing market in a legal stranglehold. If anyone still had confidence in major mortgage lenders’ ability to properly process foreclosures, today’s news reports ought to complete the crisis of faith.’’
MIKE TAYLOR

“The scandal at the center of our latest mortgage mess is not the ‘robo signers’ who played fast and loose with the affidavits submitted in foreclosure cases. It is that after years of propping up the banks and the alleged reform of the financial system under the Dodd-Frank bill, we still are teetering on the same precipice upon which we found ourselves in the wake of the Lehman Bros. collapse: Enormous amounts of toxic mortgage-backed securities remain on the banks’ books at imaginary valuations while prices for the $1.3 trillion in mortgage-backed securities are crashing, inspiring ‘too big to fail’ institutions to seek special political favors.’’
NATIONAL REVIEW

By Doug Beaton

The news wires are just packed with stories on foreclosures lately. In just a small sampling:

* All 50 state attorney generals appear to be circling the wagons around the large banks, questioning their handling of residential foreclosure procedures;

* Syndicated columnist Candice Choi raises the spectre of disbarred lawyers trying to scam homeowners based on these recent developments;

* And JP Morgan Chase annouced increased profits, but the news came out on the same day that officials from all 50 states announced a joint investigation into accusations that lenders used flawed documents to foreclose on thousands of homeowners. JPMorgan, a big player in the mortgage market, said it was expanding its review of foreclosures from 23 to 41 states, and doubling the amount of cases under review to 115,000.

Stay tuned for more to come!

By Doug Beaton

Ally Financial Inc.’s GMAC Mortgage unit has suspended foreclosures in 23 states amid suggestions that all the necessary paperwork is not in order.

The states affected are so-called judicial foreclosure jurisdictions, where a judge must sign off on the right to foreclose in court. Both Massachusetts and New Hampshire are not judicial foreclosure states, so the suspension does not apply here, but Massachusetts and New Hampshire homeowners with a GMAC mortgage in foreclosure can still seek bankruptcy relief.

By Doug Beaton