I was going to write a post about a little bit of sanity seemingly returning to the blogosphere with regard to foreclosuregate when Bank of America made this announcement.
Via the WSJ:
Bank of America Corp. on Monday began preparing new affidavits for 102,000 pending foreclosure actions where court approval is required, applying new signatures to documents in 23 states.
By Oct. 25, a spokesman said, the Charlotte, N.C., bank expects the new affidavits to be resubmitted to the courts and foreclosure sales will resume in those states starting in November.
The bank is trying to take this issue off the table. It hopes the announcement Monday and more detail expected Tuesday as it releases earnings will help restore confidence in the foreclosure process.
“This is an important first step in debunking speculation that the mortgage market is severely flawed,” a Bank of America spokesman said.
Well, it certainly didn’t take long to iron out the kinks did it? If BofA has indeed cured whatever legal deficiencies existed, and there is no reason to believe that isn’t the case given this announcement, then at least one leg of the presumed problems facing the banks would seem to have been overcome.
That is not to say that BofA or the other lenders and servicers that will shortly follow suit aren’t going to have to fend off the lawyers. The legal profession smells blood in the water and are sure to at least attempt to profit by contesting the new actions. If they don’t meet with some early successes, count on them to turn tail quickly rather than throwing good money at the issue.
BofA’s announcement contained two other points of interest. They noted that they had not found a single foreclosure thus far that was not merited and said that their largest investors had signed off on the new affidavit schedule.
That they have not identified any spurious foreclosure actions refutes a lot of the wilder claims that innocent homeowners were being dragged into the process due to a complete breakdown in the document process. One might conclude that the system was not as broken as many intimated (hoped?).
I’m guessing that the statement about their largest investors signing off on the new process means that those investors are prepared to play out the game via the foreclosure route rather than using the document flaws as a pretext for putting their investment back to BofA.
Of course, that doesn’t mean that there won’t be attempts to wriggle out by some investors but it may well indicate that the big guys have assessed the likelihood of being made whole via litigation and concluded the odds probably weren’t good enough to justify the cost of litigation.
From the beginning, the commentary on this problem seemed to have been long on speculation and hyperbole and short on critical analysis of the issues. Or to put it another way, a lot of the media seems to have jumped to a lot of conclusions. The bring down the banks crowd used it to advance their larger agendas and a lot of pundits followed along too quickly. Maybe there is more here than I see and maybe BofA is whistling past the graveyard, but until proven otherwise I’m going to maintain that there is not that much here to get worked up about.
In the end, we may sum up this whole episode with two words — Never Mind.