Tuesday, October 12, 2010

States to Probe Mortgage-Service Firms - WSJ.com

States to Probe Mortgage-Service Firms - WSJ.com

A coalition of as many as 40 state attorneys general is expected Wednesday to announce an investigation into the mortgage-servicing industry, an effort some of them hope will pressure financial institutions to rewrite large numbers of troubled loans.

"We look forward to cooperating with the attorneys general," said a spokesman for J.P. Morgan Chase & Co., which has suspended foreclosure sales and evictions in 23 states in response to questions about it use of robo-signers. A spokesman for Citigroup said the company, has "no reason to believe our employees have not been following" proper procedures in processing foreclosures. A spokeswoman for GMAC Home Mortgage Inc, a unit of Ally Financial, Inc, said it continued to review its loan documents.

The number of servicing companies that will be included in the probe hasn't been determined.

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