States expand probe of foreclosure processes

CHICAGO – May 26, 2011 – States are widening their probes of alleged “robo-signing” of mortgage foreclosure documents, with two attorneys general on Wednesday announcing new subpoenas to two Florida-based mortgage-servicing support providers not previously under investigation.

The office of Illinois Attorney General Lisa Madigan filed subpoenas against Lender Processing Services Inc. and Nationwide Title Clearing Inc., two firms that handle document preparation and management for lenders foreclosing on mortgages. Separately, California Attorney General Kamala Harris filed a subpoena against Lender Processing Services.

Among the documents requested in the subpoenas were every affidavit used in an Illinois foreclosure or bankruptcy case since Jan. 1, 2007, and the names of all employees who signed affidavits since then. The attorney general also seeks lists of all current and former employees and information on the companies’ overall loan servicing processes, including default servicing and loss mitigation.

The companies have until June 16 to respond.

Since fall, individual states and the federal government have been investigating questionable back-office practices tied to lenders’ procedures for foreclosing on consumer’s homes. Illinois previously demanded information from 26 mortgage loan servicers in the state; but on Wednesday, Madigan’s office said it was “turning our attention to third-party vendors that support the servicers in order to drill down to a greater degree in the servicing process,” a spokeswoman said.

Lender Processing Services provides support services for more than 30 million loans nationally. Nationwide Title Clearing’s customers include eight of the nation’s top 10 lenders and mortgage services.

Copyright © 2011 Chicago Tribune. Distributed by McClatchy-Tribune Information Services.

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