First the banks stepped in. Then came a joint investigation from the states. Now the foreclosure fiasco has spurred the involvement of Federal banking regulators. The Federal Reserve will look into reported irregularities in foreclosure documentation, according to Fed Chairman Ben Bernanke announced Monday in a prepared statement.
When to Expect Answers
The Fed plans to begin examining whether mortgage companies were indeed filing faulty foreclosure paperwork while evicting individuals from their homes.
“We are looking intensively at the firms’ policies, procedures and internal controls related to foreclosures and seeking to determine whether systematic weaknesses are leading to improper foreclosures,” Bernanke said.
Earlier in the month, many Americans were waiting to see how Obama would handle the foreclosure freeze. Many speculated the government would take a more hands-off approach, leaving the states to sort out the solution. The findings from the Fed’s in-depth look into the foreclosure process should be released next month. These results will just be the initial findings and a more extensive report will come later.
President Barack Obama addresses the foreclosure crisis:
Some Banks Resume Foreclosure Processing
The foreclosure crisis remains very much up in the air as attorneys, banks and politicians are looking for answers. Bank of America® on Sunday admitted to have found some problems in its mortgage foreclosure paperwork. The errors found were categorized as minor and included missteps such as misspellings or missing signatures. However minor the errors may have been, they are still a problem considering the bank found them while analyzing fewer than 1% of more than 100,000 foreclosures.
Bank of America® has resumed foreclosure processes on 102,000 foreclosures in 23 states. Another major mortgage lender, Ally GMAC, has resumed processing foreclosures as well. The mortgage industry as a whole is still under investigation in individual states for allegations employees did not review the foreclosure paperwork before signing.