SACRAMENTO, May 26 (UPI) -- California's Attorney General Kamala Harris said her office would investigate a Florida firm that processed thousands of foreclosure cases for money lenders.
The company, Lender Processing Services Inc. of Jacksonville handled paperwork for half of the mortgages in the United States, Harris said, The Los Angeles Times reported Thursday.
The state is investigating whether or not the firm rushed its foreclosure processing to the point that its staff was signing documents so quickly they could not have understood or even read the paperwork they were signing, a practice known as "robo-signing."
"California homeowners have been exposed to fraud and crime at every step of the mortgage process. Justice demands we come to their aid, and a key step in that is to investigate robo-signing and the potential for inaccurate or unjust foreclosures," Harris said.
The possibility that banks overwhelmed by huge numbers of foreclosures had hired outsourced paperwork to firms that rushed the process came to the surface last year.
This week, state and federal authorities said the five largest U.S. mortgage service firms were looking at a potential $17 billion in lawsuits for fraudulently handled foreclosures.
Various states are applying their own pressure onto the industry. New York State Attorney General Eric Schneiderman is investigating Wall Street firms that sold mortgages as bundled securities that contributed to the financial meltdown of 2008.
Illinois Attorney General Lisa Madigan said this week she had issued subpoenas to two firms in Florida, LPS and Nationwide Title Clearance Inc.
LPS did not respond to a request for comment, the Times said. Nationwide Title Clearing said in a statement, "The company stands behind their mortgage assignment documents and procedures, which have been thoroughly audited and examined for accuracy."