2/3 of State attorney generals to investigate foreclosures

Discussion in 'Wall St. News' started by ASusilovic, Oct 10, 2010.

  1. (Reuters) - More than two-thirds of state attorneys general plan this week to launch a joint probe into charges some banks used fraudulent paperwork to kick struggling borrowers out of their homes, a source familiar with the effort told Reuters on Sunday.

    Bank of America, the nation's largest mortgage servicer, an industry term for a firm that collects mortgage payments, on Friday said it would put a temporary halt to foreclosures nationwide as it looks into reports of shoddy paperwork.

    Bank of America is the first bank to halt foreclosures in all 50 states. Bank of America, JPMorgan Chase & Co and Ally Financial Inc's GMAC Mortgage had earlier announced plans to suspend foreclosures in 23 states pending a review of foreclosure procedures.

    The mortgage unit of Ally Financial, which is 56.3 percent owned by the U.S. government after a $17 billion bailout, has said employees preparing foreclosures had submitted affidavits to judges containing information they did not personally verify.

    Senate Majority Leader Harry Reid, who is facing a tough re-election November 2 in Nevada, where foreclosure rates are the highest in the nation, called on Friday for a national moratorium on foreclosures after Bank of America's announcement.

    The source, who spoke on condition of anonymity, said the deadline for attorneys general to sign on to the investigation effort led by Iowa's Tom Miller was at the end of the day Monday, so a formal announcement could be made Tuesday.