By Jeremy Pelofsky

WASHINGTON (Reuters) - The Justice Department stepped into the fray on Wednesday over reports the country's largest mortgage lenders evicted struggling borrowers from their homes by signing documents without proper scrutiny.

Attorney General Eric Holder said the Justice Department is looking into media reports that loan servicers are improperly using "robo-signers" to process thousand of foreclosures a month.

House of Representatives Speaker Nancy Pelosi and fellow Democrats wrote to Holder earlier this week asking the Justice Department look into the matter after receiving reports from thousands of homeowners about their foreclosure woes.

Also on Wednesday, Wells Fargo & Co reached an agreement with eight states over allegedly deceptive marketing practices of home loans. Under the agreement, Wells Fargo will offer loan modifications with a total value of more than $772 million.

In the aftermath of the financial crisis and ensuing recession, banks are expected to take over a record 1.2 million homes this year, up from about 1 million last year and just 100,000 as recently as 2005, according to real estate data company RealtyTrac Inc.

There has been a push by federal and state officials to suspend foreclosures after reports that banks signed large numbers of foreclosure affidavits without conducting a proper review.

Banks and loan servicers, companies that collect monthly mortgage payments, reportedly have used "robo-signers" -- middle-ranking executives who signed thousands of affidavits a month claiming they were knowledgeable of the cases.

STATES TAKE ACTION

The issue came to the fore last month when Ally Financial Inc, formerly known as GMAC, revealed that officials had signed thousands of affidavits without having personal knowledge of the borrower's situation.

Ally suspended evictions and post-foreclosure proceedings in 23 states last month. JPMorgan Chase & Co and Bank of America later said they were suspending some foreclosures in 23 states while they reviewed their practices.

Lenders are scrambling to defend and improve foreclosure procedures under scrutiny in state courts and from regulators.

North Carolina's attorney general, Roy Cooper, on Wednesday became the latest state official to ask lenders to suspend home repossessions as he expanded a probe into improper foreclosure processes.

Senator Robert Menendez earlier this week raised the idea of a national foreclosure moratorium. Menendez and Senator Al Franken, a fellow Democrat, also called for congressional investigators to look into reports of misconduct in the foreclosure practices of Ally, JPMorgan and Bank of America.

"We are concerned that shortcomings in policies and procedures at these companies may have resulted in routine filings of false affidavits in foreclosure proceedings," they wrote to the head of the Government Accountability Office, the watchdog arm of Congress.

Ohio Attorney General Richard Cordray, a Democrat who is running for reelection against former Republican Senator Mike DeWine, was due to announce a lawsuit on Wednesday against a national loan servicer "for fraudulent practices potentially involving hundreds of Ohio mortgage loan foreclosures."

(Writing by Corbett B. Daly; Editing by Leslie Adler)