Forty state attorneys generals will soon announce a joint investigation into banks' use of flawed foreclosure paperwork and the announcement could come as early as tomorrow. Tom Miller, Iowa's Attorney General, will lead the investigation.
The multiple state investigation will put even more pressure on banks to broaden their suspensions of foreclosures. Last week Bank of America was the first bank to stop foreclosures nationwide.
PNC Financial and JPMorgan Chase & Co. have also stopped foreclosures in the 23 states where foreclosures must be first approved by a judge.
The trend of suspending foreclosure proceedings has been growing due to evidence that shows that mortgage lenders have been using flawed court papers to evict homeowners. As a result it has led to both state and federal officials to continue to add more pressure on the mortgage industry.
Furthermore, officials in several states have announced that they are going to investigate potential legal violations and may put a freeze on foreclosures.
The chairman of the Senate Banking Committee, Sen. Christopher Dodd, D-Conn., said he would hold a hearing on the issue next month and U.S. Attorney General Eric Holder has also said the federal government will also be looking into the foreclosure issue.