LA Business
About 40 state attorneys general are expected to announce a joint investigation into faulty foreclosures as early as Tuesday morning, following Monday’s Columbus Day holiday.
Several media outlets are reporting the anticipated investigation, which would place further pressure on the nation’s largest banks to follow Bank of America’s lead in declaring a nationwide foreclosure moratorium.
Lenders face mounting criticism over how they’re handling home foreclosures, often using automated processes to speed completion of the documentation needed to recover possession of homes from delinquent borrowers.
Iowa Attorney General Tom Miller is leading talks with his counterparts in other states to announce the probe as soon as Tuesday, Bloomberg News reported over the weekend, citing a source with direct knowledge of the matter.
Bank of America said Oct. 8 that it was halting foreclosures in all 50 states. No timetable for resuming foreclosures was provided by the bank, but it’s hard to imagine the nation’s largest bank triggering a tsunami of foreclosures ahead of Santa’s arrival.
Previously, BofA, J.P. Morgan Chase & Co. and Ally Financial, formerly GMAC, all agreed to foreclosure moratoriums in the 23 states that require judicial review as part of the foreclosure process. California is not one of those states.
Bank of America’s decision to halt all foreclosures nationwide is likely to be followed by other large banks as they face growing political pressure.
But on Oct. 8, Wells Fargo said it has no plans to halt foreclosures.
Also that day, Senate Banking Committee Chairman Christopher Dodd said he will hold a hearing on Nov. 16 to investigate allegations of improper and fraudulent mortgage servicing and foreclosure proceedings.
“American families should not have to worry about losing their homes to sloppy bureaucratic mismanagement or fraud,” Dodd said.
