'Robo-signing' controversy grows

Uncertainty could scare homebuyers from foreclosures

The "robo-signing" controversy over lenders’ allegedly lax foreclosure procedures is picking up momentum, with the Office of Comptroller of the Currency ordering the nation’s largest lenders to review their foreclosure processes.

The OCC has directed Bank of America, J.P. Morgan Chase, Citibank, HSBC, PNC Bank, U.S. Bank, Wells Fargo and GMAC Mortgage to make sure they are following proper procedures and that no harm has been done in the past, the Washington Post reported, citing an OCC spokesman.

In testimony before members of the Senate Banking Committee Thursday, OCC Acting Director John Walsh said some lenders clearly had deficiencies in their systems, the Post reported. The committee was holding a hearing on implementation of the financial regulatory reform bill passed by Congress in July.