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40-State Inquiry into Foreclosures Could Be Announced Soon
The attorneys general from as many as 40 states will reportedly take part in a joint investigation into the foreclosure practices of US home lenders. An insider familiar with the impending investigation said that an announcement could come as early as Tuesday. Bloomberg News was the first news outlet to report the impending inquiry.
The investigation will be spear-headed by the attorney general from Iowa, Tom Miller. Miller has already been at the forefront of multi-state reviews of questionable foreclosure documents. The announcement of a 40 state joint investigation would increase the pressure on Banks to institute or expand temporary halts to foreclosures. Bank of America on Friday became the first major US lender to halt foreclosures in all 50 states.
JPMorgan Chase and Ally Financial, and PNC Financial, meanwhile, have all placed a moratorium on foreclosures in the 23 states where a judges approval is required to process foreclosures. The foreclosure halts were spurred by recent reports that many lenders were using so called "robo-signers", who processed thousands of foreclosure documents daily without verifying their authenticity. The revelation has prompted a number of federal and state officials to apply pressure to the mortgage industry in recent weeks.
A number of officials have either announced investigations into foreclosure practices or called for voluntary freezes on foreclosures within their states. The attorney general of Ohio, Richard Cordray, became the first to sue a lender over the issue last week, when he filed papers alleging Ally Financial employees signed and filed false or misleading documents. An Ally spokesman has denied the allegations.
US Senator Christopher Dodd, D-Conn, who chairs the Senate Banking Committee, has announced the group will be holding a hearing on the matter in November. Two recent conference calls between officials from Treasury, the Dept. of Housing and Urban Development, White House officials, and several other agencies reportedly focused on problems with foreclosure procedures.