Regulators are taking a cautious approach in their investigation of banks’ foreclosure practices amid allegations that lenders may have used faulty paperwork to evict struggling borrowers from their homes.

So far bank regulators are only asking the institutions they supervise to gather information and take steps to ensure they are in compliance with state laws that govern foreclosures.

Ally Financial Inc.’s GMAC Mortgage, JPMorgan Chase & Co. and Bank of America have already announced that they are suspending some of their foreclosures to review whether they have been conducting them properly.

The New York Times said PNC Financial Services Group became the latest bank to declare a moratorium on the sale of foreclosed properties, suspending them for at least the next 30 days. The newspaper cited a memo received by a title insurer from the bank.

PNC spokesman Fred Solomon said the bank was reviewing its mortgage servicing procedures, but declined to elaborate.

Lawmakers and consumer groups are calling for more mortgage servicers to halt foreclosures following allegations that some loan servicers improperly used "robo-signers" to file false affidavits in thousands of foreclosure cases.

Foreclosure practices are governed by state law but federal regulators are charged with making sure banks are meeting their responsibilities.

"We expect our banks to meet the state procedures," said Kevin Mukri, a spokesman for the Office of the Comptroller of the Currency, which oversees large national banks.

Regulators are facing some criticism for not anticipating problems like improper foreclosure practices as part of their role supervising banks’ operations.

Senator Richard Shelby, the senior Republican on the Banking Committee, who said he was "highly troubled" by appearances that regulators fell down in their duties.

Mukri said that last month the OCC asked the banks it supervises to evaluate their procedures and report back on how they are handling foreclosures, a process that continues.

The agency made this move after Ally revealed that officials had signed thousands of affidavits supporting such foreclosures without having personal knowledge of the borrower’s situation.

"Once we get the reports from our servicers then we will do our own review," Mukri said.

There is no specific timetable for when banks have to report back to OCC but Mukri said regulators are "taking a very keen interest in this" and have made it a priority.

The banks contacted include Bank of America, JPMorgan, Citibank, HSBC, MetLife, PNC, US Bancorp and Wells Fargo. (Reuters)