$120 million settlement reached over faulty foreclosure practices
SUN-TIMES MEDIA WIRE January 31, 2013 9:24AM
Updated: March 2, 2013 12:02PM
Illinois will get more than $4 million out of a $120 million settlement between 46 states and a Florida-based business, stemming from allegations that the firm engaged in pervasive “robo-signing” of foreclosure documents and other faulty servicing practices while servicing struggling homeowners’ loans.
The 46 attorneys general reached the settlement after an investigation into Jacksonville, Fla.-based Lender Processing Services Inc. and its subsidiaries — LPS Default Solutions and DocX, all of which primarily provide support to banks and mortgage loan servicers, Attorney General Lisa Madigan’s office said.
The attorneys general allege LPS and its subsidiaries engaged in widespread “robo-signing,” of foreclosure documents and other fraudulent handling of foreclosure proceedings against homeowners. The states’ investigation revealed a practice by DocX of so-called “surrogate signing,” or 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, in addition to other fraudulent practices during foreclosure filings, the release said.
Madigan said that, “LPS and its subsidiaries became a sort of document factory, literally rubber stamping thousands of foreclosures with no regard for fairness and accuracy in the process.”
A lawsuit and proposed consent judgment was filed in Cook County Circuit Court that requires LPS and its subsidiaries to reform business practices and, if necessary, correct faulty documents it filed in homeowner foreclosure proceedings.