Bank of America - the biggest bank in the US - has said it will restart legal proceedings to repossess 102,000 homes.
The lender had stopped its foreclosure process earlier this month after it emerged that thousands of cases may have been mishandled.
The bank said it would restart proceedings in 23 states.
It is continuing an internal review of cases in the other 27 states, but said it expected fewer than 30,000 foreclosures to be seriously delayed.
"As was the case for our judicial state review, our initial assessment findings show the basis for our foreclosure decisions is accurate," said a spokesman for the bank.
The news was greeted well by markets, with Bank of America's and JP Morgan's share prices rising 2.9% and 2.4% respectively by the close of trading on Monday.
JP Morgan also suspended its foreclosures this month for similar reasons.
The news coincided with unexpectedly strong quarterly profits announced by Citigroup - who has not frozen its foreclosures. Citi's share price rose over 5%.
It follows revelations that foreclosures by some banks may have relied the legal testimony of "robo-signers" - junior employees who signed thousands of legal documents on behalf of the banks without understanding their content.
Meanwhile all 50 US states began investigations on Friday into the banks' foreclosure process.
"We've intensified the ongoing reviews of our process, and based up on these reviews we have not identified any systemic problems," said John Gerspach, chief financial officer of Citigroup.
Some analysts think that the robo-signer problem arose simply because banks were struggling to cope with the sheer unprecedented volume of foreclosures and took short-cuts.
According to industry figures, more than 2.5 million US homes have been repossessed since December 2007.
However, others worry that it could belie a deeper problem.
They suggest that many home loans may not have been correctly documented when they were originally made during the housing bubble, leaving the banks unable to pursue their claims against borrowers through the courts.