Wednesday, October 6, 2010
Backlash Over Flawed Foreclosure Paperwork Rises; Many Government Officials Calling for a Freeze
The uproar over bad conduct by mortgage lenders intensified yesterday as lawmakers in Washington, D.C., requested a federal investigation and the attorney general in Texas joined a chorus of state law enforcement figures calling for freezes on all foreclosures, the New York Times reported today. House Speaker Nancy Pelosi (D-Calif.) and 30 other Democratic representatives from California told the Justice Department, the Federal Reserve and the comptroller of the currency that "it is time that banks are held accountable for their practices." Texas Attorney General Greg Abbott (R) sent letters to 30 lenders demanding they stop foreclosures, evictions and the sale of foreclosed properties until they could provide assurances that they were proceeding legally. Both developments indicated that scarcely two weeks after the country's fourth-biggest lender, GMAC Mortgage, revealed that it was suspending all foreclosures in the 23 states where the process requires judicial approval, concerns about flawed foreclosures had mushroomed into a nationwide problem.