NEW YORK (
) -- Banks in trouble for cutting corners on home foreclosures undoubtedly have their sympathizers, but they apparently won't be pushing Washington for a fix.
"Legislation is the wrong approach, since this is an internal matter," says Scott Talbott, senior vp for government affairs at the Financial Services Roundtable, a trade group that counts
Bank of America
among its members.
Also, says Talbott, "legislation will take too long; this needs to be done quickly."
Talbott says banks are likely to hire more employees to read foreclosure files. "Since the essential problem was that employees were overburdened by the volume of the foreclosures and didn't take the time to read the file before signing the affidavit, the fastest, most efficient, most accurate solution is to hire more employees to read the files."
Bank spokespeople did not appear ready to announce a big hiring spree, however.
"We have increased our foreclosure prevention staff from approximately 2,000 at the end of 2007 to more than 5,000 today," wrote Citigroup spokesman Mark Rodgers, adding "we believe the integrity of our process is sound."
Citigroup and Wells Fargo have not agreed to halt foreclosures as other banks, including JPMorgan and Bank of America have done. A spokeswoman for Wells did not respond to an email asking if the bank plans more hires.
As for JPMorgan, "we continually review our staffing needs, but it is important to remember that the affidavits were prepared by appropriate personnel with knowledge of the relevant facts based on their review of the company's books and records. The issue was with the signatures and notarization," wrote spokesman Tom Kelly. Asked what it would do to address the last issues, he wrote, "we re-file as appropriate."
Bank of America spokespeople did not respond to an email asking whether the bank planned more hires.
Konrad Alt, managing director at financial services consulting firm Promontory Financial Group, says the "robo-signing" issue is relatively easy to fix.
"You're talking about at any given bank bringing in perhaps handfuls of more senior people to review the affidavits," he says.
Potentially a more serious question, though, is whether the documents being attested to are in good order.
" Some lenders are fairly sloppy in this area. How complicated the fix ends up being at a given lender will really depend on the quality of their files. At any large lender, it may take quite a bit of research to evaluate the completeness and reliability of the loan files and the work required to make them more complete and reliable may differ from one institution to the next," he says.
Written by Dan Freed in New York
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