Foreclosures Slow Down for Wells Fargo and CitiBank

Foreclosures have sharply declined for Wells Fargo and CitiBank due to more strict government regulations. Due to these more serious rules, these two banks are selling foreclosed properties at reduced prices. This information came from a research firm that tracks foreclosures.

Many banks have been mishandling borrowers who are struggling from the increasing number of foreclosures. In 2010, there was a major “robo-signing scandal” with foreclosure documents. “Robo-signing” a document is when a person signs a document without really reading or understanding its contents.

This can be disastrous for borrowers and may lead to them falsely foreclosed upon. Staff members of banks have also been having trouble processing borrowers’ documents as well as handling the various complaints they receive on a daily basis.

In response to these problems, regulatory agencies issued a proclamation to these banks. They said that there would be a new way for delinquent borrowers to be handled in the last 60 days before their house is foreclosed upon.

Well Fargo’s foreclosure sales are now reduced to a trickle and have not been going well. They are now at a quarter of what they once were, which is not a good sign. For example, in California Well Fargo’s foreclosure sales totaled 25 this past May when it used to go up to 100 per week. This is a huge difference from before.

Citigroup’s sales also declined in May as well as well as JP Morgan Chase &Co’s sales. Bank of America didn’t show signs of slowing down.

The banks will have to comply with new guidelines being set out by the OCC.  Wells Fargo and CitiBank said they were in the process of doing so as well as other banks.