One of the nations largest mortgage processing firms has agreed to a settlement in which they will pay more than $120 million to states where homeowners were wrongfully foreclosed upon and forced to move.
Our Miami foreclosure attorneys understand the agreement was inked between Florida-based Lender Processing Services Inc. and 46 states, as well as the District of Columbia.
The terms of this settlement will not only provide payment to those wronged, but will also require that the firm overhaul its business practices and conduct a review/correction of all existing foreclosure documents generated between January of 2008 and December of 2010. This will no doubt prove to be a huge task, and the U.S. Attorney General has said the company must regularly report its progress in each participating state to federal authorities. The agreement bars the firm from allowing unauthorized individuals or those lacking first-hand knowledge of the case at hand to sign foreclosure documents associated with those cases.
A previous $6 million settlement reached by the company and Missouri, Delaware and Colorado means that Nevada is the only state whose cases remain unresolved. That brings the total to $127 million in payouts.
This may seem like a significant number, but consider that this firm alone had a legal reserve of nearly $225 million at the close of last year. The company’s annual revenue is somewhere in the neighborhood of $2 billion.
Individual pending civil lawsuits against the firm will continue to be ongoing.
The company was revealed to have cut significant legal corners in order to maximize their own profits – to the detriment of thousands of homeowners, who were left out in the cold – literally.
All of this stems from the practices of Lender Processing’s now-defunct subsidiary, DocX, which was shuttered three years ago amid allegations of foreclosure fraud through a practice called robo-signing. It is a practice we have come to know was widespread within the mortgage industry, with DocX being one of the biggest and most egregious violators. Robo-signing involves a bank employee or subcontractor signing thousands of affidavits and documents without first verifying the information to which they are swearing or attesting. In some cases, the firm had so-called “surrogate signers,” who forged the signatures of authorized parties, at the direction of the company. Those signatures were also notarized as if they had been given by the actual authorized person.
DocX’s founder Lorraine Brown was convicted in federal court for her role in the scam. Despite the harm she caused countless homeowners, she is expected to serve just two years in a minimum-security prison and pay a $250,000 fine. Yet her criminal conduct earned her and her company a total of $60 million between 2003 and 2009.
LPS, which represents most of the country’s 50 largest banks, continues to maintain it was a victim in all of this, with executives having no idea whatsoever of the massive fraud being perpetuated right under their noses – the fraud that reaped them a direct benefit.
While a settlement agreement will provide some relief to wronged homeowners, it falls woefully short of rectifying the actual damage inflicted.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
Lender Processing paying $121M to resolve claims, Feb. 1, 2013, By Marcy Gordon, Associated Press
More Blog Entries:
Foreclosure Case Implications of DocX Fallout Largely Ignored by Media, Jan. 7, 2013, Miami Foreclosure Lawyer Blog