Ohio's attorney general is suing Ally Financial Inc. and its GMAC Mortgage division, alleging the company violated state fraud laws in handling foreclosure cases.

The action could be the first in a wave of lawsuits by state regulators over what appear to be widespread problems in documents used by the nation's largest mortgage lenders.

Attorney General Richard Cordray said Wednesday the alleged fraud could involve hundreds of foreclosures in the state. The lawsuit claims the company's employees signed and filed false affidavits to mislead courts. Cordray called the alleged fraud the "tip of an iceberg of industrywide abuse of the foreclosure process."

A message left at Ally was not immediately returned.

"It certainly seems likely that other states will follow," said Diane Thompson, counsel at the National Consumer Law Center.

Three banks have halted foreclosures in 23 states after evidence surfaced that their employees or outside lawyers signed documents without reading them or filed inaccurate paperwork. State and federal officials have been ramping up pressure on the industry over concerns about potential legal violations.

Cordray is asking for civil penalties of up to $25,000 for every violation of the state's consumer laws and for the company to pay back any financial losses to the homeowner. He also wants the court to halt any Ally foreclosure or sale of property now pending in Ohio.

He sent letters Wednesday to four major mortgage lenders and servicers in Ohio _ JPMorgan, Bank of America, Wells Fargo and Citigroup _ to find out more about their foreclosure processes.

Also Wednesday, North Carolina's attorney general said he began investigating the state's 15 largest mortgage lenders in late September amid questions about Ally policies.

Attorney General Roy Cooper has asked each of the lenders to stop foreclosure proceedings during the review. He wants the companies to show that their procedures comply with the law.

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Sanner reported from Columbus, Ohio.