Bank of America suspends foreclosure proceedings in 23 states

Bank of America suspended foreclosure proceedings in 23 states Friday over problems with paperwork. 

The nation's largest bank joins J.P. Morgan and Ally Financial as the third major lender to put all foreclosures on hold to review whether "certain affidavits have followed the correct procedures," the company said. 

The Charlotte, N.C.-based lender was unsure how many people would be affected while they work out documentation problems, although they didn't provide any indication as to whether any errors were suspected in its records. 

J.P. Morgan Chase and Co.'s mortgage-servicing unit made a similar move on Wednesday, suspending foreclosures in the 23 states where they are handled through the courts, possibly affected more than 56,000 homeowners. 

That follows an earlier announcement of two weeks ago that loans serviced by GMAC Home Mortgage Inc., a unit of Ally Financial Inc., also would be frozen. 

The problem stems from issues with "robo-signers," middle managers who sign affidavits allowing banks to repossess homes that are in default. Several have admitted in depositions that they signed off on thousands of foreclosures without fully reviewing the loan documents.