Nevada's attorney General Catherine Cortez Masto filed civil fraud charges against Lender Processing Services and two subsidiaries alleging the company engaged in a widespread fraud of forging foreclosure documents.

The lawsuit, filed Thursday in Clark County’s Eighth Judicial District Court, accuses Jacksonville, Fla.,-based Lender Processing Services of forging signatures and fraudulently notarizing up to 4,000 documents a day in an effort to quickly process foreclosures on behalf of mortgage servicers.

The AG's office has not made allegations against any banks that hired Lender Processing Services for the back-office functions of processing foreclosures.

Nevada claims Lender Processing Services also demanded kickbacks from foreclosure law firms and called those payments “attorney’s fees” on invoices given to consumers and submitted in courts. Masto alleges the company improperly controlled the work of foreclosure attorneys, forcing them to churn out documents quickly in an assembly-line sweatshop environment.

“The robo-signing crisis in Nevada has been fueled by two main problems: chaos and speed,” Masto said in a statement.

In a statement released late Friday, Lender Processing Services strongly denied Masto's allegations and said it  "is not aware of any person who was wrongfully foreclosed upon as a result of a potential error in the processes used by our employees."

The company also said that its efforts to cooperate with Nevada officials have been been stymied by Masto's decision to outsource the investigation to a Washington, D.C., law firm, which it said is a violation of Nevada law.

"The complaint highlights misconceptions about [Lender Processing Services] and seeks to sensationalize a variety of false allegations in a misleading manner," it said.

Lender Processing Services processes more than 50% of all foreclosures in the U.S. The firm has conceded in the past that some of the signing practices at its Doc X subsidiary in Alpharetta, Ga., which was closed in 2010, were flawed. 

Last month, a Clark County grand jury indicted two of the processor's employees for overseeing teams of so-called “robo-signers” – people who signed thousands of mortgage assignments, lien releases and affidavits falsely claiming they had personal knowledge of the borrower’s finances.

Robo-signing practices are at the heart of global settlement talks involving the five largest mortgage servicers and a coalition of about 45 state attorneys general.  

The Nevada AG's office said it conducted a review of more than one million pages of documents and interviewed former Loan Processing Services employees, mortgage servicers and other industry players about the practices of robo-signing.

Nearly a dozen state and federal agencies have launched civil investigations into the company's practices, Matso’s office has said.

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