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American Home Mortgage Servicing Slaps LPS With Robo Signing Suit
Aug 23, 2011

Lender Processing Services Inc. (LPS), a provider of integrated technology and services to the mortgage and real estate industries, and its affiliate DocX LLC have been sued by American Home Mortgage Servicing Inc. (AHMSI) for the improper execution, notarization, and recording of assignments of mortgage affecting more than 30,000 residential mortgages across the country, otherwise known as robo-signing. The suit, filed in District Court in Dallas County, Texas, follows AHMSI's unsuccessful attempt to recover its losses during more than a year of discussion among the parties. AHMSI seeks: ►A declaratory judgment that the contract between the parties, as amended, is binding and effective; ►An order compelling defendants to arbitrate AHMSI's claims for breach of contract and indemnification; and ►An award of damages relating to non-arbitrable claims sufficient to reimburse AHMSI for the millions of dollars in losses stemming from defendants executing, notarizing, and recording improper assignments on behalf of AHMSI. Lender Processing Services Inc. (LPS) contends that when it discovered the practice of robo-signing at DOCX, LPS immediately notified AHMSI of its discovery of the practice, discontinuing the practice and voluntarily reviewed and remediated assignments of mortgage executed by DOCX using this practice. Upon completion of the remediation in January 2010, and at AHMSI's direction, LPS returned the remediated documents to the attorneys who had originally requested them on AHMSI's behalf. "Upon learning of this unauthorized use of surrogates, we terminated the services of DocX and promptly conducted an extensive, 50-state remediation effort to address any issues caused by this problem," said Jordan Dorchuck, chief legal officer for American Home Mortgage Servicing Inc. (AHMSI). "Our remediation efforts are, and have been, focused on correcting affected assignments of mortgage to ensure they comply with all local, state and federal laws. This has been a vast undertaking, necessitating coordination with local counsel in each state."  DocX prepared, executed and recorded lien releases, assignments of mortgage and related documents for AHMSI from April 2008 through November 2009. At no time did AHMSI sanction or know of the "surrogate signing" practices of LPS and DocX. AHMSI was recently directly by Martha Coakley, Attorney General for the Commonwealth of Massachusetts, to aggressively modify more than 5,500 Option One loans in the Commonwealth as a result of a $125 million discriminatory lending settlement with Sand Canyon, a subsidiary of H&R Block Inc.
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