By Vicki Needham - 10/06/10 05:43 PM EDT
Attorney General Eric Holder announced a task force housed in the Justice Department will look into the foreclosure practices of a number of financial institutions for possible violations.
At a Wednesday press conference, Holder said the Financial Fraud Enforcement Task Force will probe a number of foreclosure proceedings in a growing number of states where questions have been raised.
The announcement follows a letter from House Speaker Nancy Pelosi (D-Calif.) and 30 other California House Democrats calling for a Justice investigation.
"We are aware of the charges that have surfaced in the newspapers in the last couple of days, and we're looking at them," Holder told reporters Wednesday.
Pelosi and the other lawmakers have charged that homeowners have been unable to obtain help such as loan modifications because banks never responded, lost paperwork and didn't provide straightforward information on what they needed to do to avoid foreclosure.
"It appears that banks have repeatedly misled and obstructed homeowners from receiving the help Congress and the administration have sought to provide," the lawmakers wrote in a letter to the Justice Department, Federal Reserve and Office of the Comptroller of the Currency.
Officials in a growing number of states — Delaware, Texas, Maryland, Ohio, Connecticut, Florida, North Carolina, Iowa and Illinois — are asking specific banks to halt foreclosures to investigate possible problems.
Lenders seized a record 95,364 homes in August and issued foreclosure filings to 338,836 homeowners, according to RealtyTrac Inc., an Irvine, Calif.-based firm that tracks foreclosures.
The Financial Fraud Enforcement Task Force includes officials from more than 20 federal agencies as well as state and local authorities.
The Obama administration put $50 billion from the financial bailout toward helping the housing market and reducing foreclosures.
This story was updated at 3:19 p.m.