* State attorney generals to investigate foreclosures
* Joint effort not expected to push for moratorium
* Obama opposes national foreclosure moratorium
By Corbett B. Daly
WASHINGTON, Oct 10 More than two-thirds of U.S.
state attorneys general plan this week to launch a joint probe
into charges some banks used fraudulent paperwork to kick
struggling borrowers out of their homes, a source familiar with
the effort told Reuters on Sunday.
Bank of America (BAC.N), the nation's largest mortgage
servicer, an industry term for a firm that collects mortgage
payments, on Friday said it would put a temporary halt to
foreclosures nationwide as it looks into reports of shoddy
Bank of America is the first bank to halt foreclosures in
all 50 states. Bank of America, JPMorgan Chase & Co and Ally
Financial Inc's GMAC Mortgage had earlier announced plans to
suspend foreclosures in 23 states pending a review of
The mortgage unit of Ally Financial, which is 56.3 percent
owned by the U.S. government after a $17 billion bailout, has
said employees preparing foreclosures had submitted affidavits
to judges containing information they did not personally
Senate Majority Leader Harry Reid, who is facing a tough
re-election Nov. 2 in Nevada, where foreclosure rates are the
highest in the nation, called on Friday for a national
moratorium on foreclosures after Bank of America's
The source, who spoke on condition of anonymity, said the
deadline for attorneys general to sign on to the investigation
effort led by Iowa's Tom Miller was at the end of the day
Monday, so a formal announcement could be made Tuesday.
At least half a dozen attorneys general have already
announced individual investigations into the foreclosure mess.
The total number of attorneys general calling for an
investigation is not precisely known but it is expected to be
at least three dozen and possibly more.
At this stage, the joint effort is not expected to include
a call for a moratorium, the source said, though some attorneys
general have already done so in their individual states.
Many, including Miller, are running for re-election or
election to other offices.
U.S. Attorney General Eric Holder said last week the
Justice Department is looking into the widespread reports of
bogus paperwork. It is not clear if the matter is under the
jurisdiction of the states or the federal government but
federal officials are looking into the matter, the source
President Barack Obama, however, opposes a national
foreclosure moratorium, though he wants a quick resolution to
any foreclosures that might have questionable paperwork, top
White House adviser David Axelrod signaled on Sunday.
"I'm not sure about a national moratorium," Axelrod told
CBS television. "Our hope is that this moves rapidly and that
this gets unwound very, very quickly."
Banks are expected to take over a record 1.2 million homes
this year, up from about 1 million last year and just 100,000
as recently as 2005, real estate data company RealtyTrac Inc.
said last month.
(Reporting by Corbett B. Daly; Editing by Bernard Orr)