A major mortgage document processing company has reached a $120 million settlement with Connecticut, 44 other states and the District of Columbia over alleged improper filing practices.
Lender Processing Services, Inc. and its subsidiaries, LPS Default Solutions and DocX, were accused of filing documents with unauthorized signatures, improper notarizations and other defective information.
In Connecticut, it is estimated that thousands of potentially defective documents were filed in municipal land records and in state foreclosure cases. Connecticut’s share of the settlement is $1.9 million.
LPS, based in Jacksonville, Fla., provides technical support and other services to banks and mortgage loan servicing companies handling defaulted loans, foreclosures and bankruptcy.
The civil complaint against LPS is an offshoot of the “robo-signing” scandal and resulting investigations that erupted in 2010. Some of the country’s biggest mortgage lenders and servicers were accused of signing off on foreclosure documents without reviewing the accuracy of the documents.
Settlements, including a $26 billion landmark agreement a year ago, have been reached with the lenders and they have agreed to reform their practices.
“This settlement is important because it will help to protect consumers facing foreclosure from robo-signing signing practices,” Connecticut Attorney General George Jepsen said today. “Specifically, it requires the company to execute documents properly, and it prohibits signatures by unauthorized persons or those without first-hand knowledge of the facts attested to in the documents.”
In addition to the financial settlement, LPS has agreed to reform its practices; review documents executed between Jan. 1, 2009 and Dec. 31, 2010 for corrections, and provide a toll-free number for consumers who seek reviews or corrections.
LPS said today it is committed to stronger compliance and oversight of its operations, and it continues its review of previously-filed documents. Today’s settlement is one of several involving LPS on similar matters.
“As LPS continues to grow and exercise its leadership in the mortgage industry, we remain committed to enhanced regulatory compliance and operational excellence, which are crucial in our changing industry,” LPS Chief Executive Hugh Harris said.