House speaker Nancy Pelosi is urging the Department of Justice (DOJ) to launch an investigation into the handling of delinquent mortgages, loan modifications and foreclosures by banks for possible violations of laws and regulations.
The California Democrat said major institutions have been lacking in their approach to loan modifications, despite incentives provided by Congress and the Obama administration.
"We have heard numerous stories of financial institutions being uncooperative at best or misleading and acting in bad faith at worst," she said in a letter to attorney general Eric Holder.
Recent reports about the improper filings in foreclosure proceedings "only amplify our concerns that systemic problems exist in the ways financial institutions have dealt with homeowners who are seeking to avoid foreclosures," Pelosi said.
In addition to Pelosi, 30 other members of the California Democratic congressional delegation signed the Oct. 4 letter.
"The department is reviewing the letter," a DOJ spokesman said.