Florida-based ‘Robo-Signer’ Settles With Texas, 44 Other States Over Improper Mortgage Servicing


Lender Processing Services Inc. agrees to pay $120 million penalty to resolve case

AUSTIN – February 1, 2013 – (RealEstateRama) — Texas Attorney General Greg Abbott today announced that Texas, 44 other states and the District of Columbia have concluded an extended, nationwide investigation into Florida-based Lender Processing Services Inc. (LPS) and its subsidiaries’ unlawful mortgage servicing practices. Under a multistate settlement agreement negotiated by the states, LPS and its subsidiaries must dramatically improve their loan servicing practices, only allow authorized corporate officers to sign foreclosure documents, and pay a $120 million penalty – including approximately $5.76 million for the State of Texas. Attorney General Abbott issued the following statement about the settlement:

“We are pleased that sorely needed reforms continue to improve every corner of the mortgage servicing industry such that prospective homeowners can feel secure in their decision to finance a home.”

The states’ investigation examined misconduct by LPS and two of its subsidiaries – LPS Default Solutions and DocX – which perform operational and technical services for banks and residential mortgage lenders. Documents and other evidence obtained by the states revealed that LPS improperly “robo-signed” foreclosure documents that should have been executed by authorized officials who could attest to the alleged facts supporting foreclosure. LPS also failed to actually research facts that were asserted in foreclosure documents and did not properly follow statutorily required procedures when executing foreclosure actions. As a result, evidence uncovered by the states showed that LPS’ failure to comply with foreclosure laws contributed to homeowners defaulting on loans and unnecessarily losing residences to foreclosure.

The settlement accomplishes the following:

• Prohibits the LPS parties from engaging in the practice of surrogate document signing;
• Ensures that LPS has the proper authority to sign documents on behalf of a loan servicer, if it is in fact signing documents;
• Requires LPS to accurately identify the authority that the signer has in order to execute the document and where the signer works;
• Prohibits LPS from notarizing documents outside the presence of a notary and ensures that notarizations comply with applicable laws;
• Prohibits LPS from improperly interfering with the attorney-client relationship between attorneys and services; and
• Requires LPS to ensure that foreclosure and bankruptcy counsel or trustees can communicate directly with the servicer.


Texas RealEstateRama is an Internet based Real Estate News and Press Release distributor chanel of RealEstateRama for Texas Real Estate publishing community.

RealEstateRama staff editor manage to selection and verify the real estate news for State of Texas.


Previous articlePartner Hires Roy Canino as New Technical Director
Next articleEdward Allison puts his Texas clients online search needs first with addition of IDX Broker software