WASHINGTON (AP) -- More than 30 House members from California are calling on federal regulators to investigate whether mortgage companies broke the law by using paperwork that may have contained errors.
The Democratic lawmakers, led by Rep. Zoe Lofgren and House Speaker Nancy Pelosi, urged bank regulators and the Justice Department to probe whether mortgage companies violated any laws in handling foreclosures and borrowers' requests for loan assistance.
"It appears that we aren't dealing with isolated incidents and that a pattern of misconduct and obstruction is present," Lofgren said Tuesday.
The lawmakers sent the letter to Attorney General Eric Holder, Federal Reserve Chairman Ben Bernanke and John Walsh, acting comptroller of the currency
A Federal Reserve spokesman said the central bank will respond to the letter. Representatives for Holder and Walsh declined to comment.
The action represents the strongest push to date for federal regulators to intervene in a growing problem in the nation's foreclosure process. To date, state attorneys general have taken the lead on the issue.
Three banks have halted foreclosures in 23 states after evidence surfaced that their employees or outside lawyers signed documents without reading them. Numerous state and federal officials have been ramping up pressure on the mortgage industry over concerns about potential legal violations, including signing documents without reading them and filing inaccurate paperwork.
"I want to know how deep this problem goes and what safeguards are now in place to prevent unjustified rubber-stamp foreclosures from happening in the future," Sen. Robert Menendez, D.-N.J., wrote Tuesday to the three major lenders that have halted thousands of foreclosures - JPMorgan Chase, Bank of America and Ally Financial.
Menendez, who leads a Senate subcommittee that oversees housing issues, also sent similar letters to more than 100 other companies.
Along with Sen. Al Franken, D-Minn., Menendez also requested that Congress' investigative arm, the Government Accountability Office, examine whether federal regulators overlooked problems at mortgage companies. They asked the GAO to recommend whether federal regulatory agencies should have more authority.
Sen. Jeff Merkley, D-Ore., has urged the Treasury Department and the Department of Housing and Urban Development to launch their own investigations.
On Tuesday, Massachusetts Attorney General Martha Coakley called on the same three lenders - plus Wells Fargo & Co. - to halt foreclosures. That state is not affected by the three banks' foreclosure freeze because it does not require judges to approve foreclosures.
But Coakley noted that lenders still must comply with state law, which requires that borrowers receive official notices before a foreclosure is complete.
"We are concerned that major lenders gave scant attention to compliance with state law governing foreclosures," she said.
Earlier in the week, Maryland Gov. Martin O'Malley, Delaware Attorney General Beau Biden and Texas Attorney General Greg Abbott called on lenders to suspend foreclosure actions until they can ensure that banks have followed proper procedures.
Connecticut Attorney General Richard Blumenthal last week asked a state court to freeze all home foreclosures for 60 days. And Ohio Secretary of State Jennifer Brunner has asked a federal prosecutor to review thousands of Ohio foreclosures.
A Florida investigation into foreclosure practices was dealt a setback this week when a state judge denied a subpoena for information from a law firm. Florida Attorney General Bill McCollum had sought the information.
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