Lender Processing Services, Inc., and its now defunct subsidiary DocX, a document processing company located in Georgia, settled a robo-signing civil lawsuit for $2.5 million.
In November 2012, the former president of DocX, Lorraine Brown, was criminally charged with racketeering for her alleged role in authorizing the fraudulent signing of mortgage documents filed in Michigan. The felony charge against Brown and the civil settlement are the result of an investigation into questionable mortgage documents filed with Michigan’s Register of Deeds offices during the foreclosure crisis.
In April 2011, an investigation was launched after county officials across the state reported that they suspected Assignment of Mortgage documents filed in their offices may have been forged. A”60 Minutes” news broadcast had shown that the name “Linda Green” was signed to thousands of mortgage-related documents nationwide, but with many different variations in handwriting. County officials in Michigan reviewed their files and found similar documents, thus raising questions about the authenticity of the documents filed.
In his investigation, documents prepared by DocX and filed in Michigan were reviewed. DocX processed mortgage assignments and lien releases for residential lenders and servicers nationwide. The investigation revealed that former DocX president Lorraine Brown allegedly orchestrated a widespread scheme in which employees were directed to forge signatures on mortgage documents in order to execute these documents as quickly as possible, producing increased profits for DocX. Internally, DocX identified this practice as facsimile signing or surrogate signing. The investigation revealed that more than 1,000 unauthorized and improperly executed documents were filed with county registers of deeds throughout Michigan.
In light of the findings of the investigation, Brown was criminally charged on November 26, 2012 with one count of Conducting Criminal Enterprises (Racketeering), a 20-year felony, in Kent County’s 61st District Court. A criminal charge is merely an accusation, and the defendants are presumed innocent unless proven guilty.
LPS suspended DocX‘s operations in 2010, halting its work as a mortgage document processor. The $2.5 million settlement, which includes DocX, its parent company, Lender Processing Services, Inc., and another LPS subsidiary, LPS Default Solutions, was filed in Ingham County Circuit Court. The settlement amount is based upon estimated earnings generated from the alleged illegal conduct related to documents filed in Michigan, in addition to obligations to correct improperly executed documents when possible and take other remedial and preventative action. Additionally, the settlement includes requirements aimed at preventing such conduct from recurring, requirements to correct documents when possible, and requirements to provide consumer support.
Michigan Attorney General Bill Schuette announced the settlement.
LPS will make a toll-free hotline available for consumers who have questions about any mortgage documentation filed by DocX, and the telephone number will be posted on Schuette’s website once the hotline goes live. Consumers can check back at www.michigan.gov/mortgagesettlement for more information.
“Shortcuts like robo-signing are just one example of the damage caused by the mortgage foreclosure crisis,” said Schuette. “Our investigation into questionable mortgage practices remains ongoing, and we will bring to justice every lawbreaker we find.”