Oct 13, 2010 /EIN Presswire/ – The Obama Administration is backing the group of state attorneys general from across the nation in their investigation of fraud foreclosure practices by major lenders, including J.P. Morgan Chase, Bank of America and Ally Financial.

The investigation covering more than 40 states seeks to eliminate unfair practices and misinformation of mortgage companies in regards to unfair foreclosures. White House Press Secretary Robert Gibbs stated the White House’s support for the attorneys general but warned of possible unintended consequences on a broader moratorium.

These allegations of unfair foreclosures come on the heels of Bank of America temporarily halting foreclosures in all 50 states.

The Senate Banking Committee will hold a hearing next month to further investigate allegations that mortgage company employees are using illegal, inaccurate and unverified data to foreclose on thousands of mortgages nationwide during the current economic crisis. The issue has also become a partisan debate in Congress, with many Democratic lawmakers calling for a national ban on mortgage foreclosures until further review of company practices.

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