Robo-Signers and Surrogate Signers Prevalent in Mortgage Fraud; CO’s AG settlement with LPS

In a statement released yesterday, Colorado Attorney General John Suthers announced that ”the State of Colorado will receive $1.8 million as part of a settlement with Lender Processing Services, Inc (LPS) for past document execution practices by LPS subsidiaries DocX, LLC and LPS Default Solutions, Inc. “

Lender Processing Services, its subsidiaries DocX, LLC and LPS Default Solutions charge a fee to mortgage loan servicers to locate and assemble documents necessary to file a foreclosure.

It had been discovered legal documents produced by LPS’s subsidiaries had variations of the same signature on their documents. From the beginning of 2008 to the end of 2010, mortgage loan servicers authorized certain employees of LPS subsidiaries (DocX and  Default Solutions) to sign mortgage-related documents on behalf of others.

Workers at LPS, had signed tens of thousands of sworn foreclosure affidavits with someone else’s name. The employees were told they weren’t “forging” signatures – they were only “surrogate signers”. Much like the infamous “Robo-signers” – the “surrogate signers” were churning out legal documents signing someone else’s name. Whether the ‘someone else’ even exists, is yet to be determined.

In Palm Beach County, Florida, an LPS supervisor was mentioned in several foreclosure cases, including the foreclosure of Lynn Szymoniak. The LPS “surrogate name” of Linda Green popped up on several documents, all signatures were different from one another. Attorneys said they didn’t know if there really was a Linda Green.

In Colorado, during a period from January 1, 2008 to December 31, 2010, employees and agents of DocX were directed by management to implement a program where employees signed mortgage-related documents in another employee’s name. These documents included lost instrument affidavits, deed of trust lien releases and assignments of deeds of trust. Some of the mortgage-related documents generated or executed by LPS subsidiaries contained defects such as unauthorized signatures and improper notarizations.

A former LPS worker, Cheryl Thomas, admitted in a Florida deposition to notarizing as many as 1,000 sworn affidavits each day, most without witnesses.

As part of the Colorado settlement, LPS and its subsidiaries agreed not to engage in any surrogate signing without an affiant’s (someone who makes an affidavit) review and personal knowledge of the accuracy or the completeness of statements in the documents. Daniel T. Scheuble, President of DOCX, LLC and Thomas L. Schilling, EVP and Chief Financial Officer for LPS Default Solutions, Inc. signed the State of Colorado ASSURANCE OF DISCONTINUANCE, October, 29, 2012.

North Carolina filed a lawsuit in April 2012 naming LPS as one of the defendants stating nearly 75% of the documents filed between 2006 and 2010 were “robo-signed”. Their Register of Deeds office doesn’t have the resources to identify and correct all the defective paperwork resulting in legal uncertainty over property titles and inhibits the ability to collect property taxes.

DocX , LLC was indicted by a Missouri Grand Jury on forgery charges in August 2012. Criminal charges were dismissed, and under the agreement LPS will pay the state of Missouri $2 million.

On October 16, 2012, DocX and LLC reached a settlement with the Delaware Attorney General. Several other states have also indicted or in the process of indicting the subsidiaries as well.

The Colorado settlement funds will go toward reimbursing the Colorado Attorney General’s Office for its attorney fees and costs, for programs related to foreclosure prevention, loan modification and housing and for future consumer protection and antitrust enforcement and education efforts in the state.

Attorney General John Suthers further stated “This settlement with LPS is part of our on-going investigation into all facets of the foreclosure process in Colorado. It is important that the foreclosure process work as intended and that borrowers and the legal system have confidence in it.”

Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.

About theglawfirm1

Gantenbein Law Firm is a Denver, Colorado Tax Law Firm, servicing all of Colorado. Gantenbein Law Firm also specializes in Colorado Real Estate Law, Colorado Foreclosure Defense, Wills & Trusts, and Business Law.
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