Bank of America Corp. and Ally Financial Inc., two of our nation’s largest home mortgage lenders, announced last week that that they would resume active foreclosures in 23 so-called judicial foreclosure states, or those states where foreclosures move through the courts. The two banks had previously announced they were suspending foreclosures across the country on October 1 after claims came to light that they and other prominent lenders used “robo-signers” to sign thousands of affidavits at multiple lending institutions certifying that they had reviewed loan documents that they had never in fact seen.

The banks’ announcements capped two weeks of increasing uncertainty in the housing market. While some state's attorneys general continue to push for a foreclosure moratorium, there is growing consensus that pressing “pause” on the crisis is no solution.

Instead, jurisdictions and the federal government should implement foreclosure mediation programs so that responsible homeowners and their lenders or mortgage servicers have at least one chance prior to
foreclosure to review the documentation and ensure the foreclosure is both legal and appropriate. Getting the parties face to face with each other and the documents in the presence of a neutral, third-party expert on foreclosure mediation can immediately help restore certainty to the foreclosure process before foreclosures run their course.

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