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Federal Reserve isn’t taking foreclosure irregularities lightly


Federal Reserve Chairman Ben Bernanke said the central bank and other regulators are “intensively” examining financial firms’ home-foreclosure practices and expect preliminary findings next month.

“We have been concerned about reported irregularities in foreclosure practices at a number of large financial institutions,” Bernanke said today at a housing conference in Arlington, Va. “We are looking intensively at the firms’ policies, procedures and internal controls related to foreclosures and seeking to determine whether systematic weaknesses are leading to improper foreclosures.”

Ally Financial Inc.’s GMAC Mortgage unit, JPMorgan Chase & Co. and Bank of America Corp. are among loan servicers that temporarily halted foreclosures while the companies review paperwork. Court documents have showed that employees might have submitted affidavits without confirming their accuracy, a practice that state officials say could amount to fraud. Iowa Attorney General Tom Miller is leading an investigation by all 50 states into foreclosure practices.

“We take violations of proper procedures seriously,” Bernanke said in the prepared text of welcoming remarks to the conference on mortgages and housing finance, hosted by the Federal Reserve and the Federal Deposit Insurance Corp.

Bernanke didn’t comment on the outlook for the economy or monetary policy, eight days before the Fed meets to decide on what economists and investors expect will be a plan to boost growth by restarting large-scale securities purchases. After discussing foreclosures, he devoted much of his remarks to the Fed’s housing-market efforts, such as studies, conferences and events serving troubled borrowers.

Click here to read the entire story at Bloomberg.com.

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