Why Bank of America’s Claim of ‘No Foreclosure Problems’ Doesn’t Hold Water

From Daily Finance by Abigail Field.

After a 16-day review of its foreclosures, Bank of America (BAC) has pronounced itself satisfied: It found no problems at all with any of them, and it’s ready to resume processing foreclosures. The bank told The New York Times it has “not found a single example where a foreclosure proceeding was brought in error,” and “We did a thorough review of the process, and we found the facts underlying the decision to foreclose have been accurate.”

Let’s be blunt: That’s a claim so unbelievable it doesn’t pass the straight-face test.

First, Bank of America has already foreclosed on a couple of houses bought with cash, which is the banking equivalent of a hospital’s “never event”: a mistake like amputating the wrong limb — so basic and so bad it should never occur. And just as smaller, albeit still serious, errors in medical care occur more frequently than those tragic “never events,” it’s hard to imagine that foreclosures on two cash-bought homes were the only errors among BofA’s many, many foreclosures. (Similarly, another major national bank that insists it has no problems with foreclosures — JPMorgan Chase (JPM) — tried to seize a home it hadn’t foreclosed on.) …

Ms. Field provides an accurate and blunt view of what’s really going on, as opposed to what the players are telling us.