(COLUMBUS, OH)–Ohio Attorney General Mike DeWine today announced that he and 45 other Attorneys General have reached a $120 million multi-state settlement with Lender Processing Services, Inc. and its subsidiaries, LPS Default Solutions and DocX, resolving allegations that the Jacksonville-based company "robo-signed" documents and engaged in other improper conduct related to mortgage loan default servicing.
"The practice of 'robo-signing' caused significant damage to many Ohioans during the housing crisis when buyers were sold mortgages that they could not sustain payments on," said Attorney General DeWine. "This settlement will set up proper safeguards to reduce misuse of 'robo-signing,' so that Ohioans are not set up for failure when they sign a mortgage."
The settlement will require proper execution of documents, prohibit signature by unauthorized persons or those without first-hand knowledge of facts attested to in the documents, require enhanced oversight of the default services provided, and require a review of all third-party fees to ensure that the fees have been earned and are reasonable and accurate. The settlement also:
- Prohibits LPS (including DocX) from engaging in the practice of surrogate signing of documents;
- Requires that LPS must obtain proper authority to sign documents on behalf of a servicer, if in fact it is signing documents;
- Requires LPS to accurately identify the authority that the signer has to execute the document and where that signer works;
- Prohibits LPS from notarizing documents outside the presence of a notary and ensures that notarizations will comply with applicable laws;
- Prohibits LPS from improperly interfering with the attorney-client relationship between attorneys and services;
- Prohibits LPS from incentivizing or promoting attorney speed or volume to the detriment of accuracy;
- Requires LPS to ensure that foreclosure and bankruptcy counsel or trustees can communicate directly with the servicer;
- Requires LPS to have enhanced oversight and review of processes over third parties it manages, including those entities that perform property preservation services;
- Prohibits LPS from imposing unreasonable mark-ups or other fees on third party providers' default or foreclosure-related services;
- Requires LPS to establish and maintain a toll-free phone number for consumers concerning document execution and property preservation services (including winterization, inspection, preservation, and maintenance); and
- Requires LPS to modify mortgage documents that require remediation when LPS has legal authority to do so and when reasonably necessary to assist a consumer or when required by state or local laws.
Once the judgment is entered by the courts, 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 Attorneys General of the status of its review and/or modification of documents.
The Ohio Attorney General's Office will receive $2,544,990 in relief from the settlement, which will be placed in the Attorney General's Court Order Fund for programs to provide assistance to families and inpiduals who are at risk of foreclosure or have already lost their home. The relief was pided among the states based on the number of documents generated by LPS and DocX in each state between January 2008 to December 2010. Ohio received the 14th largest share of the settlement.
The following states joined Ohio in today's settlement: Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.
–30–
Documents
Multi-State Settlement with LPS (PDF)
Media Contacts
Dan Tierney: 614-466-3840
Lisa Hackley: 614-466-3840