Lawmakers Want Mortgage Answers

WASHINGTON (KCBS) – Some California lawmakers are looking to get answers from banks when it comes to mortgages and foreclosures.

More than two dozen members of the California Congressional Delegation are calling for a federal investigation of the handling of delinquent mortgages and foreclosures.

Many have said they have received thousands of complaints from constituents, including East Bay Congressman John Garamendi.

KCBS Melissa Culross Reporting:

“I know that in my district, foreclosures are devastating the community,” said Garamendi. “Laws that were passed, money that was made available to the banks to extend the ability of people to stay in their homes, to modify the mortgages simply hasn’t happened.”

Reports that JP Morgan, Ally Financial and Bank of America have halted foreclosure proceedings in many states due to possible mismanagement have amplified the lawmakers’ concerns.

But Chris Thornberg with Beacon Economics said investigating banks for taking shortcuts to expedite the foreclosure process won’t help the housing crisis.

“What they are doing is preventing foreclosures on the basis of a technicality,” he said. “What isn’t at issue here is the fact that these folks who are getting foreclosed on are not paying their mortgage.”

The lawmakers are asking the Attorney General, Fed Chairman and Treasury Controller to investigate.

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