Senate banking panel sets foreclosure hearing

WASHINGTON (Reuters) - The Senate Banking Committee will hold hearings after next month's elections to look into allegations that the nation's largest lenders have improperly foreclosed on struggling borrowers.

"American families should not have to worry about losing their homes to sloppy bureaucratic mismanagement or fraud," outgoing panel Chairman Christopher Dodd said in his announcement of the November 16 hearings.

"I am deeply troubled by recent revelations and allegations of practices by some of the nation's largest lenders," the retiring Connecticut senator said.

Political pressure is mounting on U.S. banks to halt foreclosures amid reports that some have cut corners to speed the foreclosure process.

The session would take place during a "lame duck" session of Congress after the November 2 elections where Democrats are expected to face heavy losses at the polls. The new members would not take office until next year.

Bank of America Corp said earlier on Friday it is halting foreclosures and sales of foreclosed properties in all 50 U.S. states pending a review of its internal processes.

Bank of America, the largest U.S. mortgage servicer, is the first U.S. bank to suspend foreclosures in all 50 states.

Last week, Bank of America, JPMorgan Chase & Co and Ally Financial Inc's GMAC Mortgage announced plans to suspend foreclosures in 23 states pending a review of foreclosure procedures.

Attorney General Eric Holder has said the Justice Department would look into media reports that loan servicers improperly have used "robo-signers" to push through thousands of foreclosure orders.

The moves on foreclosures risk further slowing the U.S. economic recovery, leaving banks unsure how they will be able to claw back losses and the housing market overshadowed by a mounting inventory of homes still likely to face foreclosure in future.

(Reporting by Corbett B. Daly. Editing by Robert MacMillan)