Fed jumps into foreclosure investigation

Associated Press

WASHINGTON

Raising pressure on banks, the Federal Reserve is wading into the investigation of whether mortgage lenders cut corners and used flawed documents to foreclose on homes.

Major banks are already under investigation by state officials with subpoena power, who could force them to detail how they handled hundreds of thousands of foreclosure cases.Federal Reserve Chairman Ben Bernanke added weight to those efforts Monday by saying the central bank would look “intensively” at policies and procedures that might have allowed banks to seize homes improperly.

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