Federal Reserve looking into bank foreclosure procedures
In a buyers' market, a sold sign can be heartwarming to sellers. (October 2010) Credit: AP
U.S. banking regulators are examining mortgage lenders' procedures to see if they are improperly foreclosing on homes, Federal Reserve chairman Ben S. Bernanke said.
"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 yesterday at a housing conference in Arlington, Va.
Ally Financial's GMAC Mortgage unit, JPMorgan Chase & Co., and Bank of America Corp. are among loan servicers that temporarily halted foreclosures while the companies review paperwork. Court documents have showed that employees might have submitted affidavits without confirming their accuracy, a practice that state officials say could amount to fraud.
Sales of existing homes rose in September by the most on record as cheaper borrowing costs help stabilize an industry that's battling the headwinds of foreclosures and unemployment, an industry report showed Monday. Purchases increased 10 percent to a 4.53 million annual rate from 4.12 million in August, the National Association of Realtors said Monday in Washington. Economists forecast sales would rise to a 4.3 million pace, according to the median projection in a Bloomberg News survey. The median price fell 2.4 percent from a year earlier.
- Bloomberg News
