California Attorney General Kamala D. Harris has announced that she has subpoenaed Jacksonville, Fla.-based Lender Processing Services Inc. (LPS), as part of her continuing probe into "robo-signing" of mortgage documents and other illegal activities in the mortgage servicing industry, especially misconduct affecting borrowers facing, or in the midst of, foreclosure. Robo-signing is the practice of signing documents used by banks or mortgage servicing companies to foreclose on borrowers without verifying their accuracy—often thousands of different documents signed by a single individual per day. In many cases, the robosigners don't even read or understand the document they are signing.
"California homeowners have been exposed to fraud and crime at every step of the mortgage process," said AG Harris. "Justice demands we come to their aid and a key step in that is to investigate robosigning and the potential for inaccurate or unjust foreclosures."
Former LPS employees have testified that LPS designees "robo-signed" foreclosure documents. LPS prepared and recorded these foreclosure documents on behalf of many of the largest mortgage lenders and servicers in the country. Attorney General Harris' investigative subpoena requires LPS to produce documents and provide written answers to questions from the Attorney General's office. The time period covered by the subpoena runs from Jan. 1, 2007, until just before the compliance date, which is no later than June 24 of this year.
Lender Processing Services Inc. (LPS), based in Florida with several offices in California, provides loan management services to mortgage lenders, including document preparation services and a software platform used by much of the mortgage industry. According to its Web site, LPS systems are used for servicing over 50 percent of all mortgages in the United States and more than 80 financial institutions contract with LPS to service more than 30 million loans with an outstanding principal balance exceeding $4.5 trillion.