Colorado Attorney General John Suthers has announced that the State of Colorado will receive $1.8 million as part of a settlement with Lender Processing Services Inc. (LPS) for past document execution practices by LPS subsidiaries DocX LLC and LPS Default Solutions Inc. Florida-based LPS provides technology and other services to mortgage loan servicers.
During a period from Jan. 1, 2008-Dec. 31, 2010, certain residential mortgage loan servicers authorized specific persons employed by LPS subsidiaries DocX and LPS Default Solutions to sign or assist with the execution of mortgage-related documents, including lost instrument affidavits, deed of trust lien releases, and assignments of deeds of trust. Some of the mortgage -related documents generated or executed by LPS subsidiaries contained defects such as unauthorized signatures and improper notarizations.
“This settlement with LPS is part of our ongoing investigation into all facets of the foreclosure process in Colorado,” said AG Suthers. “It is important that the foreclosure process work as intended and that borrowers and the legal system have confidence in it.”
Between March 1, 2009-Nov. 1, 2009, employees and agents of DocX were directed by management of DocX to implement a program under which some DocX employees signed mortgage-related documents in the name of other DocX employees, who were or had been at one time authorized to sign on behalf of certain mortgage servicers. DocX referred to these signers as “surrogate signers,” who then executed certain mortgage-related documents in the name of other DocX employees without indicating that the document had been signed by a surrogate signer.
"This settlement is another important step in our continuing efforts to resolve legal and regulatory issues related to past, discontinued document execution practices," said Hugh Harris, president and chief executive officer of LPS. "LPS remains focused on resolving all remaining legal and regulatory challenges as expeditiously as possible, and is committed to ensuring that we continue to operate with integrity and compliance in everything we do."
As part of the settlement, LPS and its subsidiaries agree not to engage in any surrogate signing program or execute any mortgage-related documents without an affiant’s review and personal knowledge of the accuracy and completeness of the statements in the documents. LPS and its subsidiaries also will ensure that any mortgage-related document that is executed on behalf of a servicer is done pursuant to proper and verifiable authority to sign on behalf of the servicer.
The terms of the settlement provide for, among other things, a payment of $1.3 million and reimbursement of $500,000 for fees and costs to the Colorado Attorney General's Office.
The settlement funds will be used for programs related to foreclosure prevention, loan modification and housing, to reimburse the Colorado Attorney General’s Office for its attorney fees and costs, and for future consumer protection and antitrust enforcement and education efforts in the state.