October 13th, 2010 5:13 PM by Lehel S.
Bank of America is freezing foreclosure sales in all 50 states as it reviews its process for handling related documents.
So what does that mean for California homeowners who are in danger of defaulting on the loan or are already in foreclosure?
Here's a consumer guide:
Q: I'm in foreclosure on my BofA mortgage and have been notified that my home will be sold in a trustee sale. Does the freeze stop the sale?
Yes, starting Saturday. If your sale was scheduled for Saturday or later, it will be postponed at least until the lender lifts the freeze, said Dan Frahm, senior vice president of Bank of America Home Loans.
Q: What if I've gotten a notice that I'm in default on my BofA loan but have not gotten documents declaring that my home is to be sold by the lender?
It normally takes several months, after a notice of default, before a lender schedules a trustee sale with the county. During the freeze, BofA will not be seeking any trustee sales, Frahm said.
Q: I'm behind on my BofA mortgage but have not received a formal default notice. Does the freeze stop the bank from declaring me in default?
No. The bank will continue to track late payments and it will send out default notices in some cases.
Trustee sales could start up again after the freeze is lifted. In the meantime, the bank said it would work with customers to determine whether they're eligible for other solutions, including mortgage modifications.
Q: What if my home that had a BofA loan has already been sold in a trustee sale to an outside party? Can the freeze reverse this?
No. Past sales will stand, and if you are not already out of the house, you could be evicted.
Q: What if my home that had a BofA loan has already been sold in a trustee sale but the buyer was BofA? (This generally happens if no outsider bids on the property.) Does the freeze affect this?
The sale stands. But if you are still living in the home and have not been evicted, BofA will not move to evict you during the freeze, according to the bank.
Q: Does this freeze affect non-BofA loans in California?
No. BofA is the only major lender to have declared a freeze in the state.
For more information, call Bank of America at (800) 669-6607.