Will we ever get through the backlog? From the WSJ:
Some of the nation’s largest banks, including Wells Fargo & Co., suspended foreclosure sales in a number of states following guidance issued last month by federal banking regulators.
While some foreclosures have since resumed, the halt marks the latest dustup over how foreclosures are handled.
Banks said their actions were triggered by a four-page bulletin issued last month by the Office of the Comptroller of the Currency and the Federal Reserve. The bulletin outlined basic operating standards for foreclosure sales. Many of the nation’s largest banks were already operating under consent orders with the OCC or the Fed in response to foreclosure-processing abuses that surfaced in late 2010.
Officials at Wells Fargo and J.P. Morgan Chase & Co. said they had postponed scheduled foreclosures earlier this month in response to the latest guidance. J.P. Morgan has since resumed foreclosures, a spokeswoman said.
A Wells Fargo spokeswoman said the bank hasn’t resumed foreclosures but said it expected the pause to be “brief.” It wasn’t immediately clear what part of the regulatory guidance had prompted the suspensions or how many states were affected.
News of the foreclosure suspensions was first reported Friday by the American Banker.
During April, Wells Fargo completed around 80 foreclosures per workday for five Western states–California, Nevada, Arizona, Oregon and Washington–according to data compiled by ForeclosureRadar, which tracks filings in those states. But since May 6, Wells Fargo has completed no more than eight foreclosures on any day.
The bank said the guidance didn’t affect other parts of the foreclosure process outside of the final step, in which the lender takes title to the property.
The slowdown in foreclosures came as a surprise to market analysts because the OCC’s compliance letter “appears to cover all of these things the banks should have been doing,” said Sean O’Toole, president of ForeclosureRadar.
An OCC spokesman said regulators hadn’t directed any foreclosure pause. “However, if servicers are not certain they are meeting these standards, pausing foreclosures is a responsible and productive step,” said OCC spokesman Bryan Hubbard.