Lender Processing Services (LPS) is the nation’s leading provider of mortgage processing services, settlement services and default solutions. LPS’s website states that throughout their 50 years of commitment to the financial services community, they have built an enviable reputation for unmatched innovation on a solid foundation of trust. Their clients include a majority of the 50 largest banks in the United States. That said, the mortgage servicing company agreed to pay $35 million to resolve a federal criminal investigation into mortgage foreclosure fraud according to the Justice Department on Friday 2/15/13.
The settlement resolves allegations over the company’s involvement in a six year scheme to prepare and file more than one million fraudulently signed and notarized mortgage documents in property recorders’ offices nationwide from 2003 to 2009! This practice known as Robo-Signing is routinely used by several large banks whereby employees sign affidavits without reviewing the documents of the foreclousure. Employees for banks such as Bank of America, Wells Fargo, JP Morgan Chase, and GMAC have all testified that they signed such affidavits.
The judgement follows a guilty plea in November 2012 by Lorraine Brown, the former CEO of LPS’s now closed DocX unit, to a felony charge of conspiracy to commit mail and wire fraud over the scheme.
Prior to DocX’s closure in 2010, LPS had handled more than half of the nation’s foreclosures.
In 2010 banks continued to abuse the system and borrowers. According to CNBC, politicians and regulators accused lenders of signing documents systematically without being read!
The penalty of faking a foreclosure document continues to rise as ten banks will now pay $8.5 billion to borrowers for so-called “robo-signing,”
Nearly four million borrowers will get either direct payments or mortgage assistance ranging anywhere from a few hundred dollars to over a hundred thousand dollars, according to federal regulators.
The banks, including Bank of America, Citibank, JPMorgan Chase and Wells Fargo, will make $3.5 billion in direct payments to borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. Four other banks,EverBank, Ally, HSBC and One West, were involved in the talks but did not sign the deal. Together they service close to half a million loans. The OCC says conversations with them continue.
All 3.8 million borrowers, designated as those who were in any stage of foreclosure in 2009 or 2010, will receive something, regardless if they were wronged in any way, according to federal regulators. The loan servicers will divide borrowers into eleven different categories, and the regulators will designate a standard payment for each category.
Bank of America’s share will be the largest at just under $3 billion in direct payments and borrower assistance. Not a bad gig for the largest money sharks in town.