NYC comptroller calls for bank foreclosure audits

NEW YORK (Reuters) - Independent directors at banks under fire for their foreclosure practices should conduct an audit of those practices, New York City Comptroller John Liu said on Tuesday.

Liu, who serves as investment adviser and trustee to the $106 billion New York City pension funds, made the request in a shareholder proposal filed at four banks -- Bank of America (BAC.N), Wells Fargo (WFC.N), JPMorgan Chase (JPM.N) and Citigroup (C.N).

The proposal calls for audit committees at each bank to conduct an independent review of the bank's internal controls governing loan modifications, foreclosures and securitizations, and to report their findings by September 2011.

"Directors are elected by shareholders and as shareholders we intend to hold them accountable," Liu said in a statement. "It's time they step forward and reassure shareholders that the banks' internal controls are robust."

Banks are accused of having used "robo-signers" to sign hundreds of foreclosure documents a day without proper review, a fiasco that has reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.

The U.S. Senate Banking Committee is set to hold a hearing on Tuesday that will include the first appearances by executives from major lenders like Bank of America and JPMorgan Chase since the furor over sloppy foreclosure paperwork erupted in September.

(Reporting by Edith Honan; Editing by Leslie Adler)