Senate Majority Leader Harry Reid joined the growing group of lawmakers Thursday to call for a foreclosure moratorium after allegations that lenders including Bank of America Corp. and JPMorgan Chase & Co. relied on lax procedures and improper paperwork in seizing homes.
Reid released an Oct. 3 letter to Ally Financial, B of A, Citigroup Inc., JPMorgan Chase and Wells Fargo & Co., asking them to suspend foreclosures in his home state of Nevada, which has been particularly hard hit by the housing crisis."I write to request that your mortgage-servicing division suspend foreclosures on Nevada homeowners until systems are in place to ensure Nevadans are not being improperly directed into foreclosure proceedings," Reid wrote.
Nevada is not among the 23 states where foreclosures have been stalled by servicers. Reid said it should be included even if its foreclosure rules differ.
"Recent reports that some mortgage servicers have made misrepresentations in foreclosure-related court documents revealed they are cutting corners in their efforts to process the large volume of delinquent homeowners," he wrote.
"Some servicers have rightfully suspended foreclosures in those states that have judicial foreclosure proceedings until they complete a review of their processes to ensure affidavits and other court documents meet the appropriate standards. While Nevada is not among those states, suspending foreclosures on Nevadans is also justified because the reports of shoddy and defective affidavit preparation suggest that servicers might not be reviewing a homeowner's loan documents with the requisite care."