Missouri AG: No Moratorium on Bank Foreclosures in Kansas City

by Simon Lindsay on cities

Chris Koster, Attorney General of Missouri, has recently announced that he will not impose a moratorium on bank foreclosures in Kansas City and the whole state, stating that to do so will cause economic harm to the area.

The statement was made by the state AG in response to requests from Kansas City Mayor Mark Funkhouser and City Council members to impose a moratorium on the sale of foreclosed properties in the metro area. Kansas City officials' call for a moratorium was prompted by Bank of America's decision to temporarily put on hold the processing of BofA foreclosures for sale.

Bank of America, along with JPMorgan Chase and GMAC, halted the sale of distressed properties in various areas of the country, including Missouri foreclosures for sale, while they review how the documents for the properties were processed.

This was done following allegations that lenders process bank foreclosed property papers without reviewing them, with some documents allegedly prepared in a fraudulent manner. In response to the allegations, GMAC even announced that it has sought the services of accounting companies to conduct independent examinations of the firm's foreclosure processes.

Koster, meanwhile, has refused to follow in the footsteps of other AGs in various U.S. states. In a statement released by the Missouri AG office, Koster reportedly stated that imposing a moratorium on bank foreclosures in Kansas City and the whole Missouri will be detrimental to the area's economy, with the AG expecting such a decision to impact lending rates and mortgage capital availability.

Meanwhile, Koster has joined other AGs from various U.S. states in their efforts to delve into the extent of the mortgage processing problem. The almost nationwide probe will reportedly analyze the issue and will formulate necessary actions to solve the problem.

While the AGs are looking deeper into allegations of faulty foreclosure processing, major lenders around the country are also conducting their own reviews. GMAC, in a statement released earlier in the week, has claimed that no evidence has so far been found that the firm has processed bank foreclosures in Kansas City and in other parts of the U.S. using inappropriate and faulty documents.

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