Officials continue to call for investigations into mortgage practices

Massachusetts Congressman Barney Frank recently called on lawmakers to arrange a hearing to investigate the alleged mortgage abuses at Ally Financial, one day after his state's attorney general made a similar request.

Reuters reported that the U.S. Department of the Treasury owns 74 percent of Ally Financial, whose GMAC Mortgage unit is being accused of illegal foreclosure practices and deceptive lending services to homeowners. In response to the allegations, Ally said it would stop buying new mortgages in Massachusetts that had been originated by correspondent lenders and wholesale brokers.

In his letter to Spencer Bachus, chairman of the House Financial Services Committee, Frank said a prompt investigation by the committee into Ally's practices is needed, as the financial institution plays a significant role in the mortgage industry, the source reported.

According to Legal Newsline, Massachusetts Attorney General Martha Coakley has not only urged Congress to investigate Ally Financial, but also filed a lawsuit against five other banks for illegal foreclosure practices as well, including Bank of America, Wells Fargo, JP Morgan Chase, Citi and GMAC; as well as the Mortgage Electronic Registration System Inc.

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