Foreclosure investigation result draws closer as attorneys general draft settlement

Foreclosure Investigation Result Nears

The foreclosure mess investigation came one step closer to its conclusion as attorneys general of all 50 states presented terms of a settlement to banks and lenders.

Federal agencies including the Federal Trade Commission, the Department of Justice and the Department of Housing and Urban Development are also involved in the probe of the foreclosure fiasco where banks allegedly processed documents haphazardly which forced Americans out of their homes.

The investigators are seeking to impose fines on the companies involved as well as revising the loan modification process.

All Financial Inc., JPMorgan Chase & Co. and Bank of America Corp. have signified in their yearly reports that they expect to pay hefty fines as a result of the foreclosure investigation.

In its filing, Ally Financial admitted that "Any of these potential actions could have a material adverse impact on us."

"This is a document that sets a foundation for negotiations with the nation's largest servicers," Geoff Greenwood told Bloomberg. He is a spokesman for Tom Miller, the Iowa Attorney General. Greenwood did not disclose the names of the lenders who received the said proposal.

According to a Bloomberg source, the investigators have yet to finalize the amount of fines they intend to slap on the banks.

In related news, cease-and-desist orders were also issued by the Office of the Comptroller of the Currency to lenders. The country's largest banks, including Citigroup Inc., JPMorgan and Bank of America, are anticipated to receive similar orders. The same national banks are the subject of the ongoing foreclosure investigation.

Posted by James Fried on Saturday March 05 2011, 11:51 PM EST. Ref: Bloomberg. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0