* Reid letter sent to largest mortgage servicers
* Call comes as Obama sends back foreclosure-friendly bill
* Reid in tough race for re-election, Nevada hard-hit (Adds comments from Reid, background on foreclosure problems)
WASHINGTON, Oct 7 (Reuters) - U.S. Senate Majority Leader Harry Reid has called for the largest mortgage servicers to suspend foreclosures in hard-hit Nevada.
“I write to request that your mortgage-servicing division suspend foreclosures on Nevada homeowners until systems are in place to ensure Nevadans are not being improperly directed into foreclosure proceedings,” Reid, a Nevada Democrat, wrote in a letter to the companies, which he did not specifically name.
So far, Ally Financial Inc's GMAC Mortgage, JPMorgan Chase & Co <JPM.N > and Bank of America BAC.N have announced that they are suspending some of their foreclosures to review whether they have been conducting them properly.
Reid released his letter on Thursday, shortly after President Barack Obama announced his opposition to a bill passed by Congress that could have made it more difficult for homeowners to challenge unjustified foreclosure actions. Obama said he would send the measure back to the House of Representatives in a procedure called a “pocket veto.”
The bill, which passed the Senate unanimously, would have required courts to accept all out-of-state notarizations, including those stamped en masse by computers in a practice that critics say has been improperly used to expedite foreclosure orders.
False notarizations figured in disclosures that Ally Financial, JPMorgan and other big mortgage processors filed false affidavits in thousands of cases, part of the the wave of foreclosures that followed the financial crisis.
Reid is in tough race for re-election in Nevada, which holds the nation’s record in jobless and foreclosure rates.
Reid noted that some servicers have halted foreclosure in the 23 states that have judicial foreclosure proceedings.
“While Nevada is not among those states, suspending foreclosures on Nevadans is also justified because the reports of shoddy and defective affidavit preparation suggest that servicers might not be reviewing a home owner’s loan documents with the requisite care,” Reid said in his statement. (Reporting by Corbett Daly; Editing by Tim Dobbyn)
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