Bank of America shifts West Coast foreclosures into overdrive
Notice of default filings jumped nearly 70% in California from the previous month, led by renewed activity from Bank of America (BAC), according to the data provider ForeclosureRadar. Foreclosure starts increased in five West Coast states from the previous month: California, Arizona, Washington, Oregon and Nevada. BofA foreclosure starts more than doubled in August, jumping 116% from the previous month. Wells Fargo (WFC) and U.S. Bank (USB) also showed increases but fell short of the BofA restart, according to ForeclosureRadar, which monitors West Coast states. "While it can’t be said for every state in the nation, we are seeing continued improvements in foreclosure volumes in many areas of the country, and that is a potential harbinger for housing market recovery," a BofA spokesperson said. "Strong gains like that from July to August demonstrate our progress – primarily in non-judicial states like California and Nevada - clearing more volume to advance to foreclosure once we pass the numerous, improved quality controls we have in place and only after all other options with homeowners have been exhausted." Bank of America along with many others froze the foreclosure process in the fall of 2010 to sort out mishandled foreclosure documentation in a scandal that became known as robo-signing. The 14 major servicers signed consent orders with federal regulators earlier this year. After a review of 2,800 foreclosure files - roughly 200 per bank - regulators found "insufficient processes" and ordered more in-depth third party look backs. "Bank of America appears to be primarily responsible for the surge in foreclosure starts this month," said Sean O'Toole, CEO of ForeclosureRadar. "Since their average time to foreclose has recently increased to more than a year, it is unclear that these foreclosure starts will lead to an increase in foreclosure sales anytime soon." In California, it takes an average 333 days to complete the foreclosure process, which is 49 days more than one year ago. Properties sold back to the bank, or REO, increased 243% in Oregon for the month as Recontrust, a subsidiary of BofA, began clearing 2,800 foreclosures that began in April, according to ForeclosureRadar. "The industry has not yet returned to normal or necessary foreclosure activity levels, but progress is certainly being made," the BofA spokesperson said. Write to Jon Prior. Follow him on Twitter @JonAPrior.