Treasury's Barr: Review Finds Breakdowns In Foreclosure Process

A U.S. Treasury Department review of foreclosures has found "widespread" and "inexcusable" breakdowns in the process, Assistant Treasury Secretary for Financial Institutions Michael Barr said Tuesday.

"These problems must be fixed," Barr told the Financial Stability Oversight Council, a new body established by the the Dodd-Frank financial regulation bill and led by the Treasury.

Several major lenders, including Citigroup Inc. (C), Bank of America Corp. (BAC), Wells Fargo & Co. (WFC), Ally Financial Inc.'s GMAC Mortgage and J.P. Morgan Chase & Co. (JPM), have been reviewing thousands of foreclosure cases amid revelations they filed large numbers of foreclosure documents without reviewing their contents.

Mortgage lenders say they are fixing the problems and will return to a normal foreclosure process quickly, though the situation has added uncertainty--and expense--to the already troubled housing and home lending markets.

-By Jeffrey Sparshott; Dow Jones Newswires; 202-862-9291; jeffrey.sparshott@dowjones.com

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