For Immediate Release
Media Contact: Bob Cooper
Date: January 31, 2013
Idaho Joins Robo-Signing Settlement with Lender Processing Services
(Boise) - Idaho has joined in a legal settlement that requires one of the nation's largest providers of mortgage loan processing services to change its business practices and pay a total of $120 million to 45 states and the District of Columbia, Attorney General Lawrence Wasden said. The settlement with Lender Processing Services, Inc. (LPS), and its subsidiaries, LPS Default Solutions and DocX, resolves allegations that the company, acting on behalf of mortgage servicers, improperly signed and notarized loan default paperwork. This practice is commonly known as "robo-signing."
Lender Processing Services, Inc., headquartered in Jacksonville, Florida, is a Fortune 1000 company that primarily provides technological support to the mortgage and real estate industries.
Between 2008 and 2010, residential mortgage loan servicers authorized certain DocX employees to sign mortgage-related documents, but some of the documents reportedly contained unauthorized signatures or improper notarizations. Employees allegedly signed documents using other employees' names, a practice known as "surrogate signing," and DocX hired temporary surrogates to execute and file thousands of mortgage-related documents each day.
"It is unfortunate that 'robo-signing' became so prevalent during the housing crisis that the word is now a permanent part of our lexicon," Wasden said. "Today's settlement is a significant step by state attorneys general to eliminate this debt collection tactic from the mortgage servicing industry and should discourage the entire lending community from adopting a similar practice."
The settlement requires LPS to properly execute mortgage documents and prohibits signatures on documents by unauthorized persons or those without first-hand knowledge of the facts stated in the documents. Additionally, LPS must implement enhanced oversight of the default services it provides and review all third-party fees to ensure that the fees have been earned and are reasonable and accurate. The settlement also:
LPS will review all documents it executed between January 1, 2008, and December 31, 2010, to determine whether any of the documents it executed require correction. If LPS is authorized to make the corrections, it will do so. LPS will report quarterly to the Attorney General regarding the status of this review.
Idaho will receive $890,995 from the settlement to reimburse the Attorney General for his legal costs.
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