U.S. banks may take at least another year to sort through millions of foreclosure files and fix improper foreclosure practices, a top federal bank regulator said Friday.
John Walsh, acting head of the federal Office of the Comptroller of the Currency, said 14 major banks will have to go through an expensive and time consuming process of reaching out to borrowers and fixing internal foreclosure-processing systems over the next year.
Last spring, regulators ordered major banks and thrifts to overhaul their foreclosure practices, finding that lenders filed foreclosures with improper documentation and lacked sufficient staff to properly handle distressed borrowers.
Read it allThe banks are working with independent consultants to identify any borrowers who were harmed by foreclosure-processing problems. The review affects 4.5 million foreclosures in 2009 and 2010 and could take "another year and more," Walsh said in a speech before the Institute of International Finance.