Major banks and federal regulators are under pressure from legislators to explain how faulty paperwork, that could slow home sales and raise cost for borrowers, went through.

Despite the mistakes the money lenders said they had corrected the mistake and told the House of Representatives subcommittee that tighter procedures were in place.

That was second congressional hearing into the issues that lenders used “fake” documentation and sign foreclosure documents without legal opinions.

The subcommittee was inquisitive and concerned on the mortgage servicing industry, what government and the industry players were doing to have the problem fixed once and for all. In case they had no solution then they simply had to vacate office.

Those brought before the subcommittee were regulators from the Federal Reserve and major banks and senior officials from the Bank of America, JPMorgan, Wells Fargo, Citigroup and Ally Financial.

The investigations are being handled by federal officials and all state attorney generals.

The problem is being taken out of proportion by some industry players. It is isolated on just a few and not majority of institutions, not widespread.

The public is furious with banks that are said to have swindled the taxpayer in the financial crisis.

The subcommittee has been encouraged by the activities taken by the accused institutions.

The penalties to be faced by the guilty banking institutions vary from fines to criminal actions.

Lenders are advised to keep enough capital for any losses incurred in the documentation problems and other issues in the foreclosure procedure.
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