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Nevada AG accused of illegally contracting with outside law firm

A foreclosure processing company being sued by Nevada Attorney General Catherine Cortez Masto’s office for fraud is claiming that its due process rights are being violated in the suit. The company, Lender Processing Services Inc., says that Masto violated Nevada law by contracting out the case to an out-of-state law firm. Masto denies any improprieties by her office in the case.

The attorney general’s office filed a lawsuit against LPS and various subsidiaries on Dec. 15. Masto alleges that the company engaged in document execution fraud. LPS is accused of committing “robosigning” by having employees forge their signatures on foreclosure documents, notarizing documents outside of the signatory’s presence and filing fraudulent papers with the Clark County Recorder’s Office. In a statement, Masto said her office uncovered widespread fraud by LPS.

In response, LPS admitted “potential issues” with the way it handled foreclosure documents in the past. However, it denied that any homeowner was wrongfully foreclosed on, and vowed to vigorously defend itself. The company also accused Masto of violating state law by hiring a Washington, D.C. law firm to handle the lawsuit. Masto called the accusation “demonstrably false.”

This is at least the second time a business defendant has accused Masto of breaking the law by contracting out a legal matter. Pulte Homes Inc. and Lennar Corp., which were investigated for predatory lending practices in 2010, sued Masto for doing the same thing in their case.

Both defendants’ suits were later settled. Pulte paid $475,000 to the state. The terms of Lennar’s settlement were not disclosed.

Source: VEGAS INC, “Nevada AG defends robosigning probe,” Steve Green, Dec. 17, 2011

John P. Aldrich
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