House Speaker Nancy Pelosi, Rep. Zoe Lofgren and other California Democrats are demanding a federal investigation into improper foreclosure practices at the nation's largest banks and mortgage servicing companies. The lawmakers sent a joint letter to U.S. Attorney General Eric Holder and federal banking regulators asking them to look into irregularities that have prompted a temporary halt of foreclosures in 23 states.

"We urge you and your respective agencies to investigate possible violations of law or regulations by financial institutions in their handling of delinquent mortgages, mortgage modifications and foreclosures," said the letter, which was signed by more than 30 lawmakers.

Congress is "perplexed" by the "pattern" of homeowners failing to work out arrangements with their lenders despite government incentives, including subsidies and loan guarantees, they wrote.

"The apparent pattern reported by our constituents leads us to conclude that their problems are not just personal anecdotes anymore," the letter said. "Recent reports that Ally Financial (formerly GMAC), JPMorgan, and Bank of America may have approved thousands of unwarranted foreclosures only amplify our concerns that systemic problems exist in the ways many financial institutions dealt with homeowners seeking to avoid foreclosure."

The lawmakers said that the "banks have repeatedly misled and obstructed homeowners from receiving the help that Congress and the administration have sought to provide. The excuses we have heard from financial institutions are simply not credible three years into this crisis."

The Pelosi letter came the same day that Sen. Robert Menendez released a letter rebuking Bank of America Corp. and other lenders for flawed handling of foreclosure documents and lax oversight. Menendez and Sen. Al Franken, D-Minn., have asked the Government Accountability Office to look into the issue.

In a letter to B of A's chief executive released Tuesday, Menendez said any homeowners improperly foreclosed on should be made whole.

"As chairman of the Senate Subcommittee on Housing … I ask that you fully document both to me and to the general public your efforts to re-evaluate all homes that have already been foreclosed and make whole those homeowners whose houses have been unjustly foreclosed," Menendez wrote. "Quite simply, the owners of these homes deserve no less."

In particular, Menendez said that it was "indefensible" that a top executive admitted under oath that " 'I typically don't read [foreclosure documents] because of the volume we sign.' "

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