Lender Processing Services Inc. has agreed to a settlement that will enable it to avoid federal criminal prosecution. The agreement will cost it far less than a recent settlement with state attorneys general.
Last month, the Jacksonville, Fla.-based service provider said that it reached settlements with attorneys general from 46 states and the District of Columbia.
The settlements cost it $127 million and resolved allegations that its former foreclosure processing unit, DocX LLC, forged foreclosure documents.
The U.S. Department of Justice announced that it reached a $35 million settlement with LPS “to address its participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States.”
The non-prosecution agreement, which was signed Friday, includes forfeiture in addition to the criminal penalties.
The government noted that former DocX CEO Lorraine Brown pled guilty on Nov. 20, 2012, in U.S. District Court for the Middle District of Florida.
Brown and her subordinates allegedly directed authorized signers to allow other, unauthorized personnel — including temporary workers — to sign documents and have them notarized as if they were executed by authorized signers. The actions, which occurred from 2003 until 2009, were taken to increase profits.
The fraudulent documents were filed with county recorders offices throughout the country.
“LPS has taken a number of remedial actions to address the misconduct at DocX,” the Justice Department said. “Among other things, LPS has wound down all of DocX’s operations, re-executed and re-filed mortgage assignments as appropriate and terminated Brown and others.
“LPS has also demonstrated changes in its compliance, training and overall approach to ensuring its adherence to the law, and has retained an independent consultant to review and report on LPS’ document execution practices; assess related operational, compliance, legal and reputational risks; and establish a plan for reimbursing any financial injuries to mortgage servicers or borrowers.”
Related:
LPS Agrees to Multi-state Settlement
A settlement announced between Lender Processing Services Inc. and most state attorneys general resolves allegations of robo-signing by a now-defunct subsidiary. LPS also settled two other lawsuits.
