Lenders Face Congressional Hearings Over Foreclosure Fraud

By Kyle Chezum Updated on 11/15/2010

11/15/2010

Many major banks are already facing serious lawsuits over erroneous foreclosure documentation.  Congress plans to hold two hearings this week with the goal of convicting banks, one way or another, to slow foreclosures and pursue loan modifications in order to keep borrowers in their homes.

In October, some lawmakers requested that all major banks halt foreclosures until the issues had been resolves, but only a few large financial institutions stopped evictions.  Those that did halt foreclosures only did so temporarily and not in all states.

Congress hopes for a settlement that involves either significant monetary fines or an agreement from banks to modify loans rather than pursuing foreclosure.

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