Attorney General Bob Cooper today announced that Tennessee and 45 other Attorneys General have reached a $120 million multistate agreement with a national loan default servicing company and its subsidiaries.
Tennessee will receive approximately $2.3 million as a result of its complaint and agreed final judgment with Lender Processing Services, Inc. and its subsidiaries, LPS Default Solutions and DocX, which are being filed today in Davidson County Circuit Court.
The agreement resolves allegations that LPS, which primarily provides technological support to banks and mortgage loan servicers, was "robo-signing" documents and engaging 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 the homeowner.
"This agreement with LPS is the next step in our ongoing efforts relating to mortgage servicing and the foreclosure process in Tennessee," said Attorney General Cooper. "It is important that the mortgage foreclosure process work as intended and Tennessee borrowers are able to rely on the accuracy of the documents used by LPS."
Among other things, the 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 agreement also accomplishes the following:
In the judgment, LPS stipulates to significant facts uncovered in the investigation, including the practice by DocX of 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.
As part of the agreement, LPS will undertake a review of documents executed from Jan. 1, 2008 to Dec. 31, 2010 to determine whether any documents 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. Consumers may also call the LPS toll-free number and request review and correction of any documents executed by LPS at any time.