We've noted there are a lot of problems surrounding MERS, which was once seen as an entity that could provide great efficiencies to the lending and mortgage servicing industry. That is, until the foreclosure fiasco raised all sorts of issues. We're seeing much the same with Lender Processing Services, which handles foreclosures on behalf of many banks and mortgage servicers. Wells Fargo (NYSE: WFC) and JPMorgan (NYSE: JPM) are prized clients.

It, too, promised an efficient, automated approach that buckled in the foreclosure fiasco. Reuters uncovered troubling facts that question the legality of the many foreclosures the firm handled on behalf of clients. Robo-signing and notarization problems were big issues. But the investigation also revealed that after the company was under pressure to halt signing operations in the wake of a federal probe it merely transferred the operations to sibling companies.

Currently, there is a federal criminal probe underway in Florida. The state is also taking a closer look. So, the company has hired Paul McNulty, former deputy U.S. attorney general, to represent it. Private lawsuits have also flooded LPS.

"Copies of LPS internal documents ... and testimony in lawsuits shed new light on the company's unusual dealings with its vast network of law firms. LPS relentlessly pressed them for speed," Reuters reports. "The result was almost instant filing of foreclosure documents, mostly prepared by clerical workers, not lawyers, according to court records, including deposition testimony by LPS officials."

According to the news source, "several judicial opinions from around the country and evidence from investigations in Florida show that these documents often were riddled with inaccurate information about the amount homeowners owed, and were signed and notarized en masse without anyone at the firms checking the information in them."

This certainly adds to the muddle that has become the foreclosure process.

 For more:
- here's the article

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