As the foreclosure-document mess continues to grow the FBI is now stepping in to investigate trying to determine if the financial industry may have violated any criminal laws regarding the mortgage foreclosure crisis.
The heart of their focus is to determine if some in the financial industry were acting with criminal intent or were they simply overwhelmed by the housing market's collapse.
Big lenders are saying they are confident that their paperwork is accurate as they try to move past the foreclosure-document crisis.
Here is where the mess stands as of today:
- Lawmakers on Capitol Hill plan to hold hearings.
- Lawyers for evicted homeowners are preparing lawsuits against major lenders.
- Attorney generals in all 50 states are jointly investigating whether lenders violated state laws.
- State judges have signaled they will review the banks' foreclosure documents with skepticism.
On Monday both Bank of America and GMAC Mortgage resumed their foreclosures in the 23 states that require a judge's approval brought a wave of denouncement from public officials by Tuesday.
Bank of America and GMAC have both stated that they are not finding any major mistakes in their documents that they have reviewed to date and have been able to fix any problems that were found quickly and easily.
According to State attorney generals and other officials, bank officials could face civil and possibly criminal charges for defying court procedures in handling foreclosure documents.
Around the nation judges have the authority to penalize bank officials who violate their procedural rules and at the same time they could also force thousands of foreclosure cases to go straight to full trials instead of issuing simple quick rulings.
The federal government has also started to get involved in the foreclosure document fiasco.
California Democrat Rep. Maxine Waters, who has introduced legislation that would bar lenders from foreclosing without offering homeowners any assistance, said on Tuesday that she was "disappointed by Bank of America's rush to resume foreclosures after such a short review."
Some lawmakers as well as various consumer advocates argue that banks need to do far more than just re-file and re-sign mountains of flawed documents. The banks must correct the system on how they handle foreclosures and requests for aid from distressed homeowners and to date those efforts have been criticized as grossly inadequate.