By Silla Brush - 10/07/10 06:53 PM EDT
Senate Majority Leader Harry Reid (D-Nev.) on Thursday called for a suspension of foreclosures in Nevada, arguing that loan servicing companies are not handling documents used in the proceedings with "requisite care."
In a letter to the largest servicing companies in the state, Reid said there should be a halt in foreclosures until there are systems in place to verify documents used in proceedings.
"To be sure, a closer review of these documents could lead a servicer to initiate a foreclosure in many cases," Reid wrote. "But I’m concerned about those cases where carefully analyzing a homeowner’s income and debt would lead to the conclusion that a modification is the best solution."
The letter was sent to Ally Financial, Bank of America, Wells Fargo, Citigroup and JPMorgan Chase & Co., Reid's office said.
The letter is the latest effort from lawmakers and advocacy organizations to pressure lenders and other loan servicing companies to review their foreclosure practices.
Rep. Edolphus Towns (D-N.Y.), chairman of the House Committee on Oversight and Government Reform, called Thursday for a national moratorium on foreclosures until banks complete internal investigations into their foreclosure practices.
Towns asked New York Attorney General Andrew Cuomo to investigate foreclosure practices by Bank of America, JPMorgan, Ally and other banks doing business in the state.
House Speaker Nancy Pelosi (D-Calif.) and 30 House Democrats from California wrote to federal regulators and the Justice Department earlier this week seeking an investigation into the foreclosure practices. The Justice Department said it would begin an investigation.
The NAACP, Center for Responsible Lending, Leadership Conference on Civil Rights, National Council of La Raza and National Fair Housing Alliance on Thursday called for a national moratorium on foreclosures.