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Washington
Pelosi urges action on possible mortgage malfeasance
WASHINGTON (10/7/10)--House Speaker Nancy Pelosi (D-Calif.) and a host of other California-based legislators urged Attorney General Eric Holder to “investigate possible violations of law or regulations by financial institutions in their handling of delinquent mortgages, mortgage modifications, and foreclosures.” JPMorgan Chase & Co., Bank of America Corp. and Ally Financial Inc., halted their foreclosure activities in several states this week amid questions over their mortgage processing. As reported on Bloomberg.com, these three lenders “have curtailed foreclosures or evictions in 23 states where courts have jurisdiction over home seizures,” and many expect the number of investigations into these types of activities to grow in the coming weeks and months. Officials in “at least seven states” are investigating claims of false mortgage documentation and verification. These actions may have been used to “justify hundreds of thousands of foreclosures,” according to Bloomberg.com. Pelosi, in a letter to Holder, Federal Reserve Chairman Ben Bernanke, and Comptroller of the Currency John Walsh, said that thousands of Californians have reported that financial institutions have “failed to respond” to homeowners’ “good faith efforts” to “work out reasonable loan modifications or simply seek forebearance on a foreclosure.” Lenders have also “misplaced requested documents” and have sent “mixed signals about the requirements that need to be met to avoid foreclosures,” the letter added. While credit unions have seen some increases in foreclosure-related activity, the majority of credit unions did not engage in the subprime mortgage market, and their general asset quality remains relatively high. "Credit unions were much more careful in their lending activities and didn't originate toxic mortgages. However, their members do reside in declining markets," Credit Union National Association Senior Economist Mike Schenk said. For the full letter, use the resource link.
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