A large number of Democratic legislators, including Arizona Congresswoman Gabrielle Giffords and U.S. Senate Majority Leader Harry Reid, D-Nev., this week called on lenders to freeze foreclosures after Bank of America did so last Friday. BofA’s decision to do so came after questions regarding their review system, and whether or not the foreclosure proceedings were simply being sped through.
JP Morgan Chase & Co. and GMAC Mortgage Corp. has also stopped foreclosure proceedings in 23 states.
“Bank of America has taken an important step and other major lenders should follow its lead,” California Attorney General Jerry Brown said in a statement.
“We need to ensure that homeowners have long-term solutions to underwater mortgages and allow bankruptcy judges to modify mortgages on residential real estate for Chapter 13 bankruptcy filers, currently prohibited under law. This will stabilize the market, offer critical bankruptcy protection, and signify a long overdue shift in focus from helping lenders to helping borrowers,”said U.S. Rep. Donna Edwards, a Democratic representing Maryland suburbs of Washington.
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