Massachusetts will received the $1.6 million as part of a $120 million national settlement between Lender Processing Services, Inc., (LPS) and 45 states’ attorneys general. Jacksonville-based LPS and its subsidiaries, LPS Default Solutions and DocX, were alleged to have engaged in "robo-signing" documents and other improper conduct related to mortgage loan default servicing.
The settlement, signed by Attorney General Martha Coakley on Thursday, requires LPS and its subsidiaries to reform their business practices and, if necessary, correct documents they executed to assist homeowners. The $1.6 million in fees and costs to Massachusetts will be allocated towards enforcement costs and addressing the harm caused by the misconduct.
"Fabricating signatures, or robo-signing, real estate documents is a serious violation of state law and puts homeowners at risk of fraud," Coakley said in a statement. "LPS has agreed to end this unauthorized action, reform its business practices, and correct any harm caused by the misconduct."
In the settlement, LPS acknowledged that DocX had engaged in robo-signing, or so-called "surrogate signing" – the signing of documents by an unauthorized person in the name of another and notarizing those documents as if they had been signed by the proper person, as well as other improprieties in the document execution and recordation or filing process.
The consent judgment 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, 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. The settlement also accomplishes the following:
LPS must now undertake a review of documents executed during the period of Jan. 1, 2008 to Dec. 31, 2010 to determine what documents, if any, need to be re-executed or corrected. If LPS will periodically report to the Attorney General’s office on of the status of its review and/or modification of documents.
