Thursday, January 31, 2013

Kansas joins multi-state “robo signing” settlement

News Release

A Florida company will be prohibited from “robo signing” mortgage documents in the future and will have to re-examine past documents to ensure consumers’ legal rights were protected, Kansas Attorney General Derek Schmidt announced today.

Attorney General Schmidt today announced that his office, 45 other state Attorneys General and the District of Columbia have reached a multi-state settlement with Lender Processing Services, Inc., and its subsidiaries, LPS Default Solutions and DocX.

The settlement resolves allegations that the Jacksonville, Fla.,-based company, which primarily provides technological support to banks and mortgage loan servicers, “robo-signed” documents and engaged in other improper conduct related to mortgage loan default servicing.

The judgment requires LPS and its subsidiaries to reform its business practices and, if necessary, to correct documents it executed to assist homeowners.

“A home mortgage is the single-largest financial transaction most consumers encounter,” Schmidt said. “Consumers deserve to know that the loans were processed with the level of due diligence and accuracy that the law expects.”

The settlement will require proper execution of documents and prohibit signature by unauthorized persons or those without first-hand knowledge of facts attested to in the documents.

It requires enhanced oversight of the default services provided, and a review of all third-party fees to ensure that the fees have been earned and are reasonable and accurate.

LPS will undertake a review of documents executed during the period of January 1, 2008, to December 31, 2010, to determine what documents, if any, need to be re-executed or corrected.

If LPS is authorized to make the corrections, it will do so and will make periodic reports to the Attorney General of the status of its review and/or modification of documents.

LPS will also be required to establish a toll-free number for consumers to call so they can request review and correction of any documents executed by LPS at any time. That hotline will be established by mid-February.