Feds investigate 'foreclosure mess'

Thursday, October 21, 2010 - 10:05am

An anonymous federal law enforcement official says the investigation is just getting started...

They're trying to figure out if lenders cut corners on foreclosure paperwork leading to a historic surge in mortgage foreclosures - or if financial institutions were simply overwhelmed by the market's collapse.

Tyler Attorney Huey C. Keeney Jr. tells us...if mistakes were made, he doesn't believe it was on purpose.

"The paperwork - yeah, I don't think anybody's intending to hurt anybody, it's just there are so many houses that are going into foreclosure, the banks can't hold on to them and so they're trying to foreclose them and sell them as quick as they can and it's an overwhelming thing for one person to sit there and after reading each affidavit...I don't think that's the intent. I think it was just, you sign it and you move on," Keeney said.

Keeney says the crisis will get worse before it gets better.

But he says - the federal government should back off and let the system clean itself out.

"We've got to get the bottom reached and then we can start over again. And as long as the government's interfering, it's going to be a continuing problem," Keeney said.

East Texas realtor Jonathan Wolf says...in today's tough economy, a deal regarding mortgage foreclosure's can often be reached.

"I would just think in these times that if you're willing to listen to your seller, there's a great chance that y'all can strike a deal. You know, times get tough, but people don't want to NOT make their payment," Wolf said.

President Obama's top housing official says they're "committed to forcing institutions to change the way they conduct business."

He says they will "force the changes to make sure these types of problems don't happen again."

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