BUSINESS

Up To 40 States Expected To Announce Joint Investigation Of Mortgage-Service Firms

10/11/2010 10:11 pm ET | Updated May 25, 2011

A coalition of as many as 40 state attorneys general is expected Wednesday to announce an investigation into the mortgage-servicing industry, an effort some of them hope will pressure financial institutions to rewrite large numbers of troubled loans.

The move comes amid recent allegations that mortgage-servicers, which include units of major banks such as Bank of America Corp., submitted fraudulent documents in thousands of foreclosure proceedings nationwide.

The banks say the document problems are technical--largely the result of papers approved by so-called robo-signers with little review--and don't reflect substantive problems with foreclosures. Still, they have drawn criticism from consumer advocates and state and federal lawmakers.

Read more on Wall Street Journal

Suggest a correction