Up to 40 US states plan probe of foreclosure data

Last Updated 10 October 2010, 04:31 IST

A joint investigation by 40 states would further escalate pressure on banks to widen their suspensions of foreclosures.

A person briefed on the investigation said Saturday night that an announcement could come as early as Tuesday. The person spoke on condition of anonymity because the investigation was not yet public.

A furor has been growing as evidence has surfaced that mortgage lenders have been using flawed court papers to evict homeowners. That has led state and federal officials to ramp up pressure on the mortgage industry.

Officials in several states have either announced they are investigating potential legal violations or have called for a freeze on foreclosures.

Iowa Attorney General Tom Miller will lead the multi-state investigation. Miller already has been leading multistate reviews of questionable foreclosure documents.

On Friday, Bank of America became the first bank to halt foreclosures in all 50 states. JPMorgan Chase and Co, Ally Bank's GMAC Mortgage unit and PNC Financial have stopped foreclosures in the 23 states where foreclosures must be approved by a judge.

The plans for a joint inquiry were reported earlier by Bloomberg News. Ohio Attorney General Richard Cordray was the first to sue a mortgage company over the issue. He sued Ally last week, claiming the company's employees signed and filed false documents to mislead courts. Ally says the company's practices were neither fraudulent nor deceitful.

(Published 10 October 2010, 04:31 IST)

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