Foreclosure process 'must be fixed,' Treasury official says
A top Treasury Department official said Tuesday that federal investigators looking into problems with mortgage foreclosures throughout the country have found widespread and "inexcusable" breakdowns in basic controls in the foreclosure process. "These problems must be fixed," Assistant Treasury Secretary Michael Barr told members of the Financial Stability Oversight Council, the newly formed panel of regulators responsible for identifying potential risks to the financial system. The extensive foreclosure problems - which range from flawed and fraudulent paperwork to questions about improper or incomplete loan transfers - first surfaced in September when large firms such as Bank of America and Ally Financial abruptly halted foreclosures. In the wake of those revelations, lawmakers and regulators have struggled to determine the depth of the problems, as well as the potential fallout. Officials this fall formed a federal foreclosure task force composed of nearly a dozen agencies working with the cooperation of the state attorneys general and numerous state banking regulators.