A Pennsylvania-based law firm has been sued for using non-lawyers to review, sign and file foreclosures that caused people to lose their homes.

The lawsuit filed in Allegheny County Court by Patrick Loughren, a Pittsburgh lawyer, accuses Goldbeck McCafferty & McKeever of allowing non-lawyers to research, write, file and prosecute thousands of foreclosures.

Last year, Goldbeck partners admitted under oath that no attorney in the firm ever reads the filings and the practice has gone on for the past several years.

The lawsuit came even as a bankruptcy court judge chastised Goldbeck and the lender it represented, Countrywide Home Loans, in a foreclosure action that led a Pittsburgh-area woman to file for bankruptcy in 2001.

U.S. Bankruptcy Judge Thomas Agresti determined last October that the firm's lawyer had persuaded the court to rely on sham lender documents that allowed it to bolster its foreclosure claim.

Agresti has directed Goldbeck to report itself to the Disciplinary Board of the Supreme Court of Pennsylvania, which could impose penalties.

If Loughren wins the lawsuit, which he is expected to do if the court look into the merits, the consequences could be far-reaching: All current foreclosure actions filed by Goldbeck could be dismissed on the grounds that the foreclosure lawsuits filed by non-lawyers are a nullity, i.e. they don't count. It also means that any homeowner who paid legal fees to the lenders and Goldbeck could get their money back.

Loughren has filed the case pro se i.e. he will not get anything from the lawsuit. However, legal experts claim the court may dismiss the lawsuit without looking into the merits of the case because Loughren doesn't have locus standi, or the right to file the lawsuit as he is not an affected party.

Nonetheless, it will bring little cheer to Goldbeck as there are thousands of aggrieved homeowners who would be eager to step into Loughren's shoes.

The lawsuit came close on the heels of a scathing criticism launched by the attorney generals of all 50 U.S. states and the District of Columbia, who are jointly investigating whether mortgage companies have violated state laws in foreclosure actions.

The attorney generals said the corner-cutting and slipshod paperwork (by lenders) are troubling and may impose financial penalties where appropriate. They also said they might require lenders to change the way they process mortgages and foreclosures.

The banks accused of hiring robo-signers, or people who signed thousands of foreclosure affidavits a month without reviewing them carefully to evict delinquent borrowers, include JPMorgan Chase & Co, Wells Fargo & Co., Ally Financial Inc. (formerly GMAC) and Bank of America.

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