CHICAGO (CN) - Lender Processing Services will pay $120 million to 45 states and the District of Columbia to settle complaints that the Florida-based company used robo-signing and other frauds in foreclosures.
The attorneys general claimed that LPS and its subsidiaries - LPS Default Solutions and DocX - engaged in widespread robo-signing of foreclosure documents and other fraudulent foreclosure proceedings against homeowners.
States filed separate agreements against the defendants last week all over the United States.
Illinois will get $4 million from the settlement, Attorney General Lisa Madigan said in a statement.
"Today we've taken another step forward to hold accountable the many players in the marketplace who contributed to the foreclosure crisis," Madigan said Friday. "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."
The settlement prohibits LPS from surrogate signing; notarizing documents outside the presence of a notary; interfering with the attorney-client relationship between attorneys and servicers; incentivizing or promoting attorney speed or volume to the detriment of accuracy; and imposing unreasonable mark-ups or other fees on third party providers' default or foreclosure-related services.
It also requires LPS to have authority to sign documents on behalf of a servicer; accurately identify the authority the signer has to execute the document and where that signer works; to ensure that foreclosure and bankruptcy counsel or trustees can communicate directly with the servicer; to implement enhanced oversight and review of processes over third parties it manages, including entities that perform property preservation services; to establish and maintain a toll-free phone number for consumers concerning document execution and property preservation services; and 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.
Also settling were Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming and the District of Columbia.Follow @@joeharris_stl
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