UPDATE 1-Fannie, Freddie seek sweeping reviews of servicers
(Adds Freddie Mac demands, details)
NEW YORK Oct 1 (Reuters) - Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), the largest providers of funding for U.S. residential mortgages, on Friday said they are taking steps with their regulator to strengthen oversight of thousands of loan servicers.
The moves to reinforce contractual obligations come after GMAC Mortgage and the mortgage servicing unit of JPMorgan Chase & Co (JPM.N) have had to review how they handle foreclosures, in light of some employees saying they authorized the practices without proper reviews.
GMAC, a unit of Ally Financial, has endured a firestorm of criticism in the past two weeks as its faulty practices came to light. Its errors, and those of JPMorgan, have raised concerns of an industry-wide problem given the volume of foreclosures plaguing the nation.
Bank of America Corp (BAC.N) on Friday said it is assessing existing foreclosure processes and is delaying some to amend affidavits in the 23 states where courts have jurisdiction.
Fannie Mae and Freddie Mac asked their servicers to immediately undertake a review of policies and procedures as they relate to affidavits. Freddie Mac placed an Oct. 18 deadline for its 2,000 servicers to complete their reviews.
Fannie Mae underscored it has a variety of remedies, including charging fees to compensate for damages. (Reporting by Al Yoon; Editing by Leslie Adler)
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