AG: $121M settlement for illegal foreclosures
By MATT CHANDLER
[email protected] | 716-541-1654
Another lender that engaged in improper business practices related to mortgages has been forced to open up its checkbook and pay.
Attorney General Eric Schneiderman recently announced a $121 million, 44-state settlement with Lender Processing Services Inc. and its subsidiaries, LPS Default Solutions and DocX, that will net New York state $1.9 million.
The settlement was set forth to resolve claims of unlawful foreclosure practices, including robo-signing. It will require LPS and its subsidiaries to reform their business practices and, if necessary, correct documents it improperly executed that harmed homeowners.
"Lender Processing Services Inc., LPS Default Solutions and DocX cut corners in order to maximize their profits," Schneiderman said in announcing the settlement. "My office will pursue any company that generates false or robo-signed documents that are used to foreclose on New York homeowners."
The agreement prohibits signature by unauthorized persons or those without firsthand knowledge of the facts attested to in filed documents.
It also enhances oversight of the default services provided and requires review of all third-party fees to ensure that the fees have been earned and are reasonable and accurate.
The settlement also creates other safeguards, including prohibiting the company from:
• Engaging in the practice of "surrogate signing" of documents
• Notarizing documents outside the presence of a notary and ensures that notarizations will comply with applicable laws.
• Improperly interfering with the attorney-client relationship between attorneys and services.
• Incentivizing or promoting attorney speed or volume, to the detriment of accuracy.
• Imposing unreasonable markups or other fees on third-party providers' default or foreclosure-related services.
Under terms of the agreement, the company is required to maintain a toll-free phone number for consumers concerning document execution and property preservation services, including winterization, inspection, preservation and maintenance.
Once the settlement is finalized by the court, LPS will begin a review of all documents executed between Jan. 1, 2008, and Dec. 31, 2010, to identify any that need to be corrected or reissued.
In addition to New York, 44 other states and the District of Columbia were part of the $121 million settlement.