Review of bank foreclosure actions step closer-NYC

NEW YORK, March 23 (Reuters) - A review of U.S. banks' foreclosure practices has come a step closer after the Securities and Exchange Commission sided with five New York City pension funds, the city's comptroller said on Tuesday.

"An independent examination of bank foreclosure practices is needed to reassure shareholders and protect pensioners and taxpayers," New York City Comptroller John Liu said in a statement. The SEC shot down the banks' claims that they had already conducted independent reviews, he said.

New York's pension funds in November had filed a shareholder proposal with Bank of America Corp(BAC.N), Wells Fargo & Co (WFC.N), JPMorgan Chase & Co (JPM.N) and Citigroup Inc (C.N) asking for independent audits of of their mortgage and foreclosure practices.

While Bank of America and Citigroup had asked that the proposal be excluded, the SEC ruled that it will go on their spring ballots, Liu said.

Wells Fargo & Co (WFC.N), which did not fight the proposal, will also put it on its ballot, while JPMorgan Chase(JPM.N) was allowed to remove the pension funds' proposal from its spring agenda because another group of shareholders had filed a similar proposal, Liu said.

The five New York City pension funds hold about $106 billion in assets, including nearly $1.7 billion in shares of Bank of America, Citigroup, JPMorgan Chase and Wells Fargo.

Citigroup declined comment. Spokesmen for the other banks could not immediately be reached for comment.

Attorneys general in all 50 states last year started looking into whether banks were forcing people out of their homes improperly following an uproar over foreclosure procedures. Several banks temporarily stopped seizing homes after allegations that some had used "robo-signers" who approved foreclosure documents without reviewing them.

"Despite banks' claims that foreclosure problems are merely technical glitches, regulators have found that robo-signing of foreclosures, missing mortgage documents and other problems have caused widespread economic damage," Liu said in the statement. (Reporting by Dena Aubin, editing by Dave Zimmerman)