Wells Fargo & Co., the biggest U.S. home lender, halted some foreclosure sales until it can understand new federal guidelines on seizures sent to the nation’s large and midsize banks.
The rules from the Office of the Comptroller of the Currency dated last month laid out minimum standards that must be met before a foreclosed home can be sold. Citigroup Inc. also said Friday it’s evaluating the OCC’s directive.
The pause is needed “while we study the revised guidance from the OCC regarding imminent foreclosure sales,” Vickee Adams, a spokeswoman for San Francisco-based Wells Fargo, said Friday in a phone interview. “We expect it to be brief,” she said.
Mortgage firms have previously imposed moratoriums amid reports of borrowers incorrectly being thrown out of homes. Complaints pushed the five largest firms to sign a $25 billion settlement last year that ended a probe of their practices.
The impact of the new halt may be muted, with U.S. mortgages that are overdue or in foreclosure standing at a four-year low, according to data released May 9 by the Mortgage Bankers Association.
Bank of America Corp. didn’t suspend foreclosure activity, said Dan Frahm, a spokesman for the Charlotte, N.C.-based lender. “We manage our mortgage-servicing operations in compliance with all laws, regulations and standards for sound business practices,” Frahm said. U.S. Bancorp’s sales also weren’t affected, said Tom Joyce, a spokesman for the Minneapolis-based company.