* LPS and Nationwide Title Clearing probed by AGs
* Accused of "robosigning" mortgage documents
* Federal investigation continues
(Updates stock price; adds background on LPS)
NEW YORK, May 25 Attorneys general in
California and Illinois have subpoenaed Lender Processing
Services Inc LPS.N and Nationwide Title Clearing Inc as part
of probes into alleged "robosigning" in the mortgage servicing
The state investigations advance efforts by federal
agencies underway since 2010.
California Attorney General Kamala Harris said in a
statement on Wednesday that her office sent a subpoena to LPS.
Illinois Attorney General Lisa Madigan said she issued
subpoenas to both LPS and Nationwide Title Clearing Inc. The
two offices are coordinating their investigations, according to
a spokeswoman for Madigan.
LPS stock was up 22 cents at $25.56, or .9 percent, in late
afternoon trading on the New York Stock Exchange. Earlier in
the day, it had fallen more than 2 percent following the
Robosigning refers to the mass signing of documents by
banks or mortgage servicing companies when they try to
foreclose on borrowers. Harris and Madigan said the so-called
robosigners did not read or understand the documents they
LPS was used by many of the largest mortgage lenders and
servicers in the country and former LPS employees have
testified documents were robosigned, Harris said.
"California homeowners have been exposed to fraud and crime
at every step of the mortgage process," Harris said in a
statement. "Justice demands we come to their aid and a key step
in that is to investigate robosigning and the potential for
inaccurate or unjust foreclosures."
Telephone calls to LPS and Nationwide Title Clearing, both
based in Florida, were not immediately returned.
LPS disclosed in an SEC filing in 2010 that it was under
investigation by federal prosecutors in Florida looking into
alleged forged signatures and other improprieties by DocX, a
subsidiary LPS shut down in August 2010. That investigation is
pending, according to individuals who have supplied information
recently to prosecutors.
The lead regulator of national banks, the federal Office of
the Comptroller of the Currency (OCC) joined other federal
banking regulators in an examination of LPS in late 2010.
In April 2011, the OCC announced it reached a settlement
with LPS -- along with other large banks that act as home loan
servicers -- for improprieties in handling foreclosures. The
settlement with LPS accused it of filing false affidavits in
foreclosure cases, filing other inaccurate foreclosure-related
documents in court and filing documents with county clerks'
offices that were not properly notarized. The settlement called
for an internal investigation by LPS, a halt to any improper
practices and remediation for any harm caused. LPS agreed to
the settlement without admitting any wrongdoing.
Other federal agencies, including the Department of Housing
and Urban Development, are continuing to investigate loan
servicers, including LPS.
(Reporting by Moira Herbst; additional reporting by Scot
Paltrow and Andre Grenon)