US-wide probe into home repossessions

All 50 US states have started a joint investigation into whether mortgage firms were wrong to repossess hundreds of thousands of homes.

It follows allegations that the companies often mishandled documents when people behind on their mortgages had their houses taken from them.

According to industry figures, more than 2.5 million US homes have been repossessed since December 2007.

On Tuesday the White House ruled out a temporary ban on home repossessions.

It warned it could result in "unintended consequences" for the housing market.

Analysts say the Obama administration is concerned a ban could hurt housing sales and damage the sector's recovery.

'Violations'

Officials in each state will study the accuracy and legitimacy of the documents that lenders used to evict people from their properties.

It follows allegations that some bank employees signed off on repossession documents without reading them.

Iowa Attorney General Tom Miller said: "This is not simply about a glitch in paperwork.

"It's also about some companies violating the law and many people losing their homes."

Lenders including Bank of America and JP Morgan Chase have already halted questionable repossessions.

Others, such as Citigroup and Wells Fargo have not done so, saying they have done nothing wrong.

Ohio Attorney General Richard Cordray said: "What we have seen are not mere technicalities.

"This is about the private property rights of homeowners facing foreclosure and the integrity of our court system, which cannot enter judgements based on fraudulent evidence."