LPS Settles with Missouri Attorney General for $2M Over Robo-signing Suit
August 9, 2012
Lender Processing Services Inc. (LPS), a provider of integrated technology and services to the mortgage and real estate industries, announced that its subsidiary DocX LLC, reached a settlement with the Missouri attorney general, resulting in a dismissal of the criminal charges pending against DocX, LLC.
The terms of the settlement provide for a voluntary contribution of $1.5 million to Missouri, reimbursement of $500,000 to the Missouri attorney general's office for its fees and costs of investigation, and a complete release of any potential liability of LPS and DocX in the Missouri.
"This settlement is an important milestone in our ongoing efforts to resolve legal and regulatory issues related to the operations of DocX, which we closed in 2010," said Hugh Harris, president and chief executive officer of LPS. "LPS remains focused on resolving all remaining legal and regulatory challenges as expeditiously as possible and is committed to ensuring that we continue to operate with integrity and compliance in everything we do."
According to Attorney General Chris Koster, the settlement LPS will will cooperate with the attorney general’s office in its continuing criminal investigation of founder and former president of DOCX, Lorraine Brown.
Koster said DOCX earned approximately $363,000 in total revenue from the execution and filing of mortgage-related documents in the state of Missouri for the years 2008-2010. Consequently, LPS’s payment of $2 million to the state is well in excess of the revenue earned by the company in the state of Missouri during the relevant time period, and is approximately two and a half times the amount that could be obtained as a result of convictions on the previously pending indictments. LPS discontinued the operations of DOCX in May 2010. LPS terminated Lorraine Brown in November 2009.
"The monetary disgorgement and the agreement we have reached in this criminal case with DOCX should remind all mortgage-services processers that our system of titling real property will be held to a standard of accuracy and truth expected by homeowners across the country,” Koster said. “I appreciate LPS taking responsibility for the actions of its subsidiary, and for their agreeing to cooperate in our continuing criminal investigation of this matter.”
Koster noted that LPS has also entered into a separate consent order with the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency that requires LPS to allow an independent, third-party consultant to conduct a review of document execution services provided by subsidiaries of LPS, such as DOCX, between January 1, 2008, and December 31, 2010. The review is intended to assess potential financial injury to borrowers. Under the federal consent order, LPS has agreed to prepare a remediation plan to provide restitution to borrowers if any such financial harm is found.