Turbulent Times for LPS from 2010-2013
Published May 23, 2013 3:29 PM
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Updated December 13, 2013 3:52 PM
1 Min Read
Closed for Business
In April 2010, Lender Processing Services conducted an internal investigation of DocX LLC, an Alpharetta, Ga., unit of for the vendor, which "identified a business process that caused an error in notarization of certain documents, some of which were used in foreclosure proceedings in various jurisdictions around the country." The unit was shut down at this time upon evidence of possible illegal activity.
Signing the Dotted Line
The Federal Reserve, the Office of the Comptroller of the Currency and Office of Thrift Supervision made LPS sign a cease and desist order in April 2011 abiding to independent foreclosure reviews. LPS was one of two vendors as well as 14 servicers including Bank of America, Chase, Citibank, CitiFinancial, Citi Mortgage, Country-Wide, EMC, Freedom Financial, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City, PNC, Sovereign Bank, Sun-Trust Mortgage, U.S. Bank, Wachovia, Washington Mutual, and Wells Fargo who had to sign this order.
State AG's Fight LPS
Several attorneys general throughout the country, such as Nevadas, Michigans, Delawares, Missouris and Colorados, as well as servicers, filed lawsuits and indictments starting in April 2011 through March 2012 against Lender Processing Services for their alleged robo-signing actions.
Robo-Signing Lawsuits Plague Vendor
A March 2012 lawsuit filed by the county register of deeds in Guilford County, N.C. claims mortgage documents in its records were robo-signed in the name of Mortgage Electronic Registration Systems Inc. and wants a court to appoint a Special Master to determine which documents are fraudulent and require servicers to refile documents. The lawsuit focuses on documents it claims were robosigned by agents of Lender Processing Services and its now-defunct DocX subsidiary.
No Stopping the Robot
In November 2012, Lorraine Brown, the former president of mortgage document processor DocX, reached a plea agreement to settle robosigning allegations pleading guilty to one felony count of forgery, a felony count of perjury, and a misdemeanor charge of making a false declaration.
Time to Pay Up
This month, Lender Processing Services agreed to pay $14 million to settle claims the company deceived investors about its business practices.
Through the Years
Lender Processing Services has had a turbulent couple of years since the beginning of the robo-signing scandal from 2010 to the present day that included lawsuits, a consent order and several settlements of charges.
