For Immediate Release - January 31, 2013

Lender Processing Services, Inc. to Pay $120 Million Over ‘Robo-signing’ Claims

Massachusetts to Receive $1.6 Million as Part of National Settlement

BOSTON – Lender Processing Services, Inc., (LPS) along with its subsidiaries, LPS Default Solutions and DocX, have agreed to pay a total of  $120 million to settle allegations that the Jacksonville-based company “robo-signed” documents and engaged in other improper conduct related to mortgage loan default servicing, Attorney General Martha Coakley announced today.

AG Coakley joins 45 other attorneys general in the consent judgment, filed today in Suffolk Superior Court, requiring LPS and its subsidiaries to reform their business practices and, if necessary, correct documents they executed to assist homeowners. LPS primarily provides technological support to banks and mortgage loan servicers. Under the terms of the settlement, LPS will pay close to $1.6 million in fees and costs to Massachusetts, which will be allocated towards enforcement costs and addressing the harm caused by the misconduct.

“Fabricating signatures, or robo-signing, real estate documents is a serious violation of state law and puts homeowners at risk of fraud,” AG Coakley said. “LPS has agreed to end this unauthorized action, reform its business practices, and correct any harm caused by the misconduct.”

In the settlement, LPS stipulates to important facts uncovered in the investigation, including the practice by DocX of robo-signing, or so-called “surrogate signing” – the signing of documents by an unauthorized person in the name of another and notarizing those documents as if they had been signed by the proper person, as well as other improprieties in the document execution and recordation or filing process.   

The consent judgment will require proper execution of documents and prohibit signature by unauthorized persons or those without first-hand knowledge of facts attested to in the documents, enhanced oversight of the default services provided, and a review of all third-party fees to ensure that the fees have been earned and are reasonable and accurate.  The settlement also accomplishes the following:

  • Prohibits LPS (including DocX) from engaging in the practice of surrogate signing of documents;
  • Requires LPS to have proper authority to sign documents on behalf of a servicer, if in fact it is signing documents;
  • Prohibits LPS from notarizing documents outside the presence of a notary and ensures that notarizations will comply with applicable laws;
  • Prohibits LPS from improperly interfering with the attorney-client relationship between attorneys and servicers;
  • Prohibits LPS from incentivizing or promoting attorney speed or volume to the detriment of accuracy;
  • Requires LPS to have enhanced oversight and review of processes over third parties it manages, including those entities that perform property preservation services;
  • Prohibits LPS from imposing unreasonable mark-ups or other fees on third party providers’ default or foreclosure-related services; and
  • Requires LPS to establish and maintain a toll-free phone number for consumers concerning document execution and property preservation services (including winterization, inspection, preservation, and maintenance).

Once the judgment is entered by the courts, LPS will undertake a review of documents executed during the period of Jan. 1, 2008 to Dec. 31, 2010 to determine what documents, if any, need to be re-executed or corrected. If LPS is authorized to make the corrections, it will do so and will make periodic reports to the AG’s Office of the status of its review and/or modification of documents.

The following states joined Massachusetts in today’s settlement: Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.

This matter is being handled by Assistant Attorneys General Amber Anderson Villa and Justin J. Lowe of AG Coakley’s Consumer Protection Division.

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