Foreclosure | featured news

Officials in 49 states have launched a joint investigation into allegations that mortgage companies mishandled documents and broke laws in foreclosing on hundreds of thousands of homeowners.

The White House Tuesday rejected calls for a broad moratorium on home foreclosures, saying it feared such a step could harm the U.S. housing market and hinder a housing recovery.

Congressional lawmakers scramble to come up with quick fix to the foreclosure fiasco that has threatened the economic recovery and thrown a monkey wrench into their re-election campaigns.Up to 40 States Plan Foreclosure Data Inquiry

The attorneys general of up to 40 states plan to announce soon a joint investigation into banks' use of flawed foreclosure paperwork.

Bank of America Corp is halting foreclosures and sales of foreclosed properties in all 50 states pending a review of its internal processes, the bank said on Friday.

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President Barack Obama will not sign legislation that could have made it more difficult for homeowners to challenge unjustified foreclosure actions, the White House said on Thursday.

Bank of America, the country's largest mortgage lender by assets, said on Friday that it was reviewing documents in all of its pending foreclosure cases to evaluate if there were errors made.

Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

Florida has set up foreclosures-only courts to reduce the state’s huge backlog of cases, but borrowers’ lawyers are critical of the process.

Foreclosures could head higher in coming months, as the percentage of borrowers at least one payment behind resumed its rise, new data suggest.