US foreclosures set for probe as Bernanke admits concern

FEDERAL Reserve Bank chairman, Ben Bernanke, said yesterday the initial findings of an investigation by US regulators into home foreclosures would be published in November.

Bernanke said federal banking agencies were conducting an “in-depth” review of practices at the largest US mortgage lenders as he addressed a joint conference of the Fed and the Federal Deposit Insurance Corporation.

“We are looking intensively at the firm’s policies, procedures, and internal controls related to foreclosures and seeking to determine whether systematic weaknesses are leading to improper foreclosures,” he said.

“We take violations of proper procedures seriously,” Bernanke added, saying the Fed and other federal agencies were evaluating the potential effects of the potential foreclosure problems on the real estate market and other financial institutions.

In recent weeks Bank of America, JPMorgan Chase, GMAC and Goldman Sachs have stopped foreclosures to review paperwork after evidence surfaced that some documents were signed without a proper vetting, a practice called “robo-signing”.