Multistate Settlement Agreement Reached Over Mortgage Document Execution Practices
Attorney General George Jepsen today announced a $120 million multistate settlement agreement with Lender Processing Services, Inc. and its subsidiaries, LPS Default Solutions and DocX, over alleged improper practices for executing mortgage-related documents.
Connecticut, one of several lead states that investigated the practices and negotiated the settlement, will receive $1,887,519 from the agreement.
A total of 45 states and the District of Columbia are participating in the settlement with the Jacksonville, Fla. company, which provides technological support and other services to banks and mortgage loan servicing companies handling defaulted loans, foreclosure and bankruptcy.
“This settlement is important because it will help to protect consumers facing foreclosure from robo-signing practices,” Attorney General Jepsen said. “Specifically it requires the company to execute documents properly and it prohibits signatures by unauthorized persons or those without first-hand knowledge of facts attested to in the documents.”
In a complaint filed in Hartford Superior Court with the settlement agreement, the state alleged that LPS-generated documents, with defects such as unauthorized signatures, improper notarizations, inaccurate information relating to the identity of the signatory or effective date of assignment, were recorded in local land records offices and filed in state court foreclosure actions.
LPS and its subsidiaries allegedly executed thousands of potentially affected documents filed or recorded in Connecticut.
In addition to the financial settlement, the company and its subsidiaries agreed to reform its business practices; to review documents executed between Jan. 1, 2009 and Dec. 31, 2010, to determine whether any need to be re-executed or corrected; and to provide a toll-free number for consumers to call to request review and correction of any LPS-executed documents.
Assistant Attorneys General Joseph Chambers and Matthew Budzik, head of the Finance department, worked with the Attorney General on this matter.