Nationwide Title Clearing Sued by Illinois Over Foreclosure Documents

Illinois Attorney General Lisa Madigan sued Nationwide Title Clearing Inc., a Florida company she claims caused the filing of faulty documents with county clerks.

“The practices that NTC used were a key contributor to the mortgage crisis by undermining the integrity and accuracy of the mortgage servicing and foreclosure process,” Madigan said today in a statement.

Nationwide Title Clearing prepares documents for mortgage servicers to use against borrowers in default, foreclosure and bankruptcy, Madigan said. Among the documents are mortgage assignments used by lenders in foreclosures.

NTC employees signed forms used in Illinois foreclosures as officers of the foreclosing financial institutions and not Nationwide, often without reading or verifying the documents they signed, Madigan said.

“NTC creates documents through an assembly-line process,” Madigan said. “NTC signers typically have little or no role in the actual creation of documents that they sign.”

Their sole role is to affix their signatures, she said.

The complaint, which accuses the Palm Harbor, Florida-based company of unfair and deceptive acts, was filed today in state court in Chicago.

Diane Stein, a spokeswoman for Nationwide, said she couldn’t immediately comment on the allegations because company officials hadn’t yet seen the complaint.

Fines Sought

Madigan seeks a court order barring those practices and requiring the company to find and fix any documents created through the “unlawful” method. She also wants the company to account for and disgorge the revenue earned from their creation.

Madigan also seeks imposition of $50,000 fines for each finding that the company breached Illinois’s Consumer Fraud and Deceptive Business Practices Act with the intent to defraud, or a single fine of $50,000 if the court finds the company violated the act without intending to commit fraud.

The case is Illinois v. Nationwide Title Clearing Inc., 12CH03602, Illinois Circuit Court, Cook County, Chancery Division (Chicago).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net