Regulators reviewing foreclosure practices: Bernanke

WASHINGTON (BestGrowthStock) – U.S. banking regulators will issue a report next month on foreclosure practices at large financial institutions, following allegations that lenders cut corners to illegally evict homeowners, Federal Reserve Chairman Ben Bernanke said on Monday.

The review, which follows probes by all 50 state attorneys general and the Justice Department, adds further pressure to banks besieged by accusations that they failed to review foreclosure documents properly or submitted false statements when they foreclosed on properties.

“We have been concerned about reported irregularities in foreclosure practices at a number of large financial institutions,” Bernanke said in opening remarks to a conference sponsored by the Fed and the Federal Deposit Insurance Corp.

“We anticipate preliminary results of the review next month,” he said. “We take violations of proper procedures seriously.”

The controversy, which has drawn public outrage, has raised fears about bank earnings and the health of a fragile housing market, which has been battered by falling prices and foreclosures of nearly 3 million homes since January 2007.

Bernanke said Fed staff were in the process of evaluating these effects.

Evidence of impropriety triggered foreclosure moratoriums by some of the biggest U.S. lenders, though Bank of America and GMAC Mortgage have since retreated from these suspensions.

Regulators reviewing foreclosure practices: Bernanke