Posted by: realtormarkpalace | October 9, 2010

Reid calls on lenders to halt foreclosures in all 50 states

Updated 12:58 p.m.

foreclosures100810.jpgSenate Majority Leader Harry Reid (D-Nev.) called on major lenders to halt foreclosures across the country Friday following Bank of America’s announcement it was stopping proceedings until it finishes reviewing possible paperwork problems.

Reid, who had sent a letter to major banks asking them to suspend foreclosures in Nevada, extended his concern to include all 50 states.

“I thank Bank of America for doing the right thing by suspending actions on foreclosures while this investigation runs its course,” said Reid. “I urge other major mortgage servicers to consider expanding the area where they have halted foreclosures to all 50 states as well.”

He emphasized, “My primary focus is to protect Nevada homeowners who have been hardest hit by foreclosures in the most recent economic downturn.”

Reid is the latest Democratic leader to join a growing chorus of lawmakers and state attorneys general who have called for greater scrutiny of the foreclosure process and a nationwide moratorium. Homeowner advocates say that lenders have used dubious paperwork to expedite the eviction of homeowners behind on their payments.

Pressure on the banks continues to grow on Capitol Hill, where Senate Banking chairman Chris Dodd (D-Ct.) said Friday the committee will hold hearings investigating the foreclosure paperwork morass on Nov 16.

Bank of America said Friday it is halting all foreclosure sales and foreclosure proceedings nationwide while it reviews the documents being used to justify homeowner evictions.

It is the first bank to put a moratorium on foreclosures in all 50 states. Previously, Bank of America, JPMorgan Chase and others were onlypausing foreclosures in states where a court has to participate in foreclosure proceedings.

“Bank of America has extended our review of foreclosure documents to all fifty states,” the bank said in a statement. “We will stop foreclosure sales until our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for foreclosure decisions are accurate. We continue to serve the interests of our customers, investors and communities. Providing solutions for distressed homeowners remains our primary focus.”

MORE FROM THE WASHINGTON POST ABOUT THE TURMOIL IN THE FORECLOSURE SYSTEM:

Full Coverage: Foreclosure system in chaos

Related stories: Northern Virginia firm MERS has a role in the the foreclosure mess

Obama rejects bill that would affect foreclosures

Problems run deeper than flawed paperwork

See photos: Thousands of foreclosures put on hold

User poll: Is a national moratorium on foreclosures a good idea?

By Jia Lynn Yang  | October 8, 2010; 11:25 AM ET
Categories:  Housing

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