The Washington Post has posted an article that discusses how the attorneys general of both Illinois and California have launched investigations to look into problems in the mortgage servicing industry.
The attorneys general are hoping that by putting pressure on the mortgage servicing firms, the firms will turn around their “shoddy foreclosure practices.” Illinois Attorney General Lisa Madigan issued subpoenas to two mortgage servicing companies base in Florida- Lender Processing Services Inc. and Nationwide Title Clearing Inc.- claiming that both firms have been taking processing shortcuts such as robosigning.
“Foreclosure became a rubber-stamping operation that robbed many homeowners of the American Dream without a fair and accurate process,” Madigan said in a statement.
California Attorney General Kamala Harris has also served Lender Processing Services with a subpoena over data discrepancies from 2007.
“California homeowners have been exposed to fraud and crime at every step of the mortgage process,” Harris said in a statement, vowing to continue looking for “inaccurate or unjust foreclosures.”
A representative from LPS couldn’t be reached, but a spokeswoman for National Title Clearing said the firm had not yet been given a subpoena, but if they were, they would cooperate fully “to the fullest extent of the law” to “clear up common misconceptions” about the mortgage assignments the company is responsible for.
Illinois and California aren’t the only states to look into the inner workings of the mortgage servicing industry. New York Attorney General Eric Schneiderman has had meetings with 7 of the top banks in an effort to investigate how mortgage securities were being bundled and sold. He has also issued subpoenas to 4 bond insurers “for information related to claims paid on mortgage-backed securities and any litigation and settlements entered into with the banks.”
In addition, attorneys general in two other states separately sent letters to Bank of America regarding foreclosures. Connecticut’s attorney general said that the firm wasn’t doing enough to help distressed homeowners, while Utah’s alleged that one of the bank’s units had not complied with state laws in its foreclosure practices.
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