Reid Urges Lenders to Suspend Foreclosures

Posted October 8, 2010 at 12:58pm

Senate Majority Leader Harry Reid on Friday lent his powerful voice to the chorus of lawmakers calling for mortgage lenders to halt foreclosures around the country.

In a statement, the Nevada Democrat praised Bank of America’s recent decision to suspend foreclosures until questions about the validity of those transactions can be answered.

“I thank Bank of America for doing the right thing by suspending actions on foreclosures while this investigation runs its course,” Reid said. “I urge other major mortgage servicers to consider expanding the area where they have halted foreclosures to all 50 states as well.”

Bank of America and other mortgage companies, such as Ally Financial and JPMorgan Chase, had initially pledged to only temporarily halt foreclosures as federal and internal investigators look into allegations that many foreclosures may be fraudulent or invalid. Those lenders have been accused of rushing foreclosures and evictions contrary to laws requiring notaries and other officials to thoroughly review foreclosure documents.

“It is only fair to Nevada home owners to suspend foreclosures until a thorough review of foreclosure processes is completed and home owners can be assured that their documents are being analyzed properly,” Reid said.

Retiring Senate Banking Chairman Chris Dodd (D-Conn.) also announced Friday that he will hold a hearing on the accusations Nov. 16, after the Senate reconvenes for a lame-duck, post-elections session.

“American families should not have to worry about losing their homes to sloppy bureaucratic mismanagement or fraud,” Dodd said in a statement. “I am deeply troubled by recent revelations and allegations of practices by some of the nation’s largest lenders. Regulators at the federal, state, and local levels have a responsibility to uphold the law and protect consumers from unfair foreclosure, and lenders have a duty to not cut corners around the law.”