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Bank of America Halts Foreclosures Nationwide 

On Friday, October 8, 2010, Bank of America announced that it would be halting foreclosure sales in all 50 states until their processes have been verified, in the wake of a scandal that alleges that many foreclosures took place illegally. The announcement follows similar decisions by other major banks, although Bank of America is the first to halt sales in all 50 states.

The latest crisis deepens problems for an already fragile housing market, which was being bolstered in part by bargains available to Idaho home buyers through the sale of Idaho foreclosures.

The scandal revolves around documentation issues, and accusations of legal documents being signed electronically without proper review. Several major financial institutions have halted sales, at least in states which have a judicial foreclosure process, until all documentation and processes can be properly reviewed – a process that involves verifying the underlying facts pertaining to tens of thousands of foreclosure documents.

Distressed homeowners may benefit in the long run from this latest upheaval, although in the meantime, they face uncertainty. It's likely that at least a small percentage of Idaho homeowners will be able to circumvent foreclosure if it's found that the process was not being handled appropriately.

Bank of America's halt on foreclosures is the only hold by a major lender that directly affects Idaho home owners, because Idaho foreclosures are not a judicial process. Because this announcement is the first to affect all 50 states, it's not entirely clear how the process will play out in Idaho and other states where foreclosure is not a judicial process.