Attorneys General in California and Illinois have issued subpoenas to two companies that help mortgage servicers manage home loans. This is the latest sign that state officials are stepping up pressure on the mortgage industry. California Attorney General Kamala D. Harris and Illinois Attorney General Lisa Madigan said they had issued subpoenas to Lender Processing Services Inc. as part of their investigation of questionable foreclosure practices, including so-called robo-signing, when employees approve legal documents without proper review. Ms. Madigan’s office said it also issued a subpoena to Nationwide Title Clearing Inc., a mortgage-industry services provider.
As the foreclosure crisis has mushroomed, fees generated from the servicing of delinquent mortgages, known as “default servicing,” have turned the once-obscure corner of the mortgage market into a billion-dollar industry.
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