(Reuters) - The Obama administration on Tuesday rejected calls for a nationwide foreclosure moratorium, citing concerns about unintended consequences for the still shaky housing market.
Some Democratic lawmakers and consumer advocates have been calling for a temporary ban on home evictions after evidence surfaced that some banks filed shoddy paperwork to support foreclosures against delinquent borrowers.
While refusing to support an outright moratorium, the Obama administration and U.S. regulators have expanded their investigation into the foreclosure controversy, according to an administration official, including:
* The Federal Housing Administration has begun a review of mortgage servicers in its program to ensure they are fully compliant with the law, and lenders are reviewing their foreclosure policies.
* The Office of the Comptroller of the Currency has directed seven of the largest mortgage servicers it oversees to review their foreclosure systems. The regulator, which oversees large national banks, has contacted JPMorgan Chase, Bank of America Corp, Citigroup Inc, HSBC, PNC Financial Services Group Inc, US Bancorp and Wells Fargo & Co.
The OCC has directed banks to fix their process problems, if they exist, and determine who has been harmed by faulty procedures.
* The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, has asked the two mortgage giants to ensure servicers they use as contractors are complying with foreclosure laws.
Servicers have been sent notices requiring a full compliance review.
* The Financial Fraud Enforcement Task Force, established by Obama in November 2009, is sharing information about the foreclosure process issues among its member agencies.
The task force is comprised of more than 20 federal agencies, 94 U.S. attorney’s offices and state and local officials.
Reporting by Joe Rauch; Editing by Tim Dobbyn