Nancy Pelosi and other California Dems want an investigation of the way finance companies have been handling foreclosures. Here's the letter they sent this week to top regulators.
It's the latest turn in the saga that started a few weeks back, when GMAC Mortgage halted foreclosures in 23 states because a company employee had signed thousands of foreclosure-related documents without reviewing them. (GMAC Mortgage is owned by Ally Financial, a Planet Money sponsor.)
Last week, Bank of America and JPMorgan Chase also halted foreclosures in those 23 states, which require a court order for all foreclosures. California, by the way, is not one of those states.
A few other pieces of the story:
The accuracy of the foreclosure documents is not in question, the banks say — only the systems for processing the documents, the FT notes.
Wells Fargo won't suspend foreclosures, Bloomberg News reports — despite the fact that a company employee at one point signed 50 to 150 documents a day without reviewing all of the information they contained. A judge has dismissed a case brought by one borrower, after finding that the foreclosure was valid.
The Texas attorney general has called for a halt on foreclosures "until companies have completed a review of their processes, including whether employees or agents 'robosigned' affidavits and other documents which were recorded in the State of Texas." At least six other states are investigating foreclosure procedures, according to Reuters.