Lender Processing Services, a company involved with processing loans for lenders has come to a $127 million settlement with 46 states over improper lending practices including robosigning. The claims were filed after it became clear that many banks and processing companies pushed through loan paperwork without appropriate due diligence. The company previously announced settlements of similar inquiries with the states of Missouri, Delaware and Colorado, leaving the complaint filed by the state of Nevada as the only unresolved attorney general inquiry. As part of the settlements, LPS confirmed its ongoing commitment to stronger compliance and oversight of its operations – and to continue its remediation efforts.
According to New York Attorney General Eric Schneiderman who was involved with this case, the settlement will prohibit people without first hand knowledge of the details in foreclosure documents from signing them and it will also require a review of all third party fees.
When entered by the court, the judgment requires LPS and its subsidiaries to reform its business practices and, if necessary, to correct documents it executed to assist the homeowner.
Lender Processing Services has a variety of litigation outstanding in the wake of the 2008 crisis, and has been working to find settlements. Beyond claims with states over robosigning, the company has also settled with some public pension funds over its practices. On Jan. 28, 2013, the company settled the securities fraud litigation brought by St. Clair Shores General Employees’ Retirement System, subject to entry of a final order by the federal district court. Additionally, in December 2012, LPS resolved litigation filed by American Home Mortgage Servicing, Inc. (AHMSI).
Once the judgment is entered by the courts, LPS will undertake a review of documents executed during the period of January 1, 2008 to December 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 appropriate Attorney General of the status of its review and/or modification of documents. Consumers may also call the LPS toll-free number and request review and correction of any documents executed by LPS at any time.
Each of the 46 states involved in the case will see award sizes based on Lender Processing Services’ involvement in their state. Georgia will be getting $4.1 million, Ohio will get $2.5 million and even less populated states like South Dakota which got over $300,000 saw fairly sizable awards.
“Today’s settlements are another major step toward putting issues related to past business practices behind us,” said LPS President and Chief Executive Officer Hugh Harris said in a statement. LPS continues to do business in the lending industry and is one of the leading processing providers.
