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LPS/DocX Settle with Missouri AG but the Investigation Continues

by devteam August 3rd, 2012 | Share

Inrncompeting press releases late Thursday Lender Processing Services, Inc. (LPS)rnand the Office of the Missouri Attorney General announced the settlement ofrncriminal proceedings against an LPS subsidiary. rnAttorney General (AG) Chris Koster said LPS will pay the state ofrnMissouri $2 million to settle indictments against DocX related to thernrobo-signing scandal of 2010.</p

Bothrnreleases reported that the settlement will requirement payment by LPS of $1.5rnmillion to the Missouri state treasury and $500,000 to the MerchandisingrnRevolving Fund of the AG’s Office in reimbursement of the costs incurred inrninvestigating DocX.  The LPS press release,rnhowever, did not mention that, as part of the settlement, it had agreed torncooperate with the AGs office in a continuing criminal investigation of DocXrnfounder and former president Lorraine Brown. rnLPS terminated Brown in November 2009 and discontinued DocX operationsrnsix months later.</p

The criminalrncharges against brought by Koster alleged forgery and making false declarationsrnrelated to mortgage documents processed by DocX in the state of Missouri.  The company was accused of falsely signing,rnnotarizing, and filing various mortgage documents in the name of senior bankrnofficers without authorization. A single DocX employee held a position asrndesignated vice president for several large banks and was authorized to signrnthe documents, but they were allegedly signed by others.</p

Koster defendedrnthe size of the settlement saying that the LPS subsidiary earned approximatelyrn$363,000 in total revenue from the execution and filing of documents within thernstate between 2008 and 2010 so the agreed-upon payment was well in excess ofrnthat amount and approximately two and a half times the amount that could bernobtained if convictions were obtained.  </p

Kosterrnalso noted that LPS has entered into a separate consent order with threernfederal regulators agreeing to a review by an independent consultant ofrndocument execution services provided by DocX and other LPS subsidiaries.  The review is intended to assess potentialrnfinancial injury to borrowers and to prepare a remediation plan to providernrestitution if harm is found.</p

“Thisrnsettlement is an important milestone in our ongoing efforts to resolve legalrnand regulatory issues related to the operations of DocX, which we closed inrn2010,” said Hugh Harris, president and chief executive officer of LPS.rn”LPS remains focused on resolving all remaining legal and regulatoryrnchallenges as expeditiously as possible and is committed to ensuring that werncontinue to operate with integrity and compliance in everything we do.”</p

Koster said, “My office has takenrnthe position that when you sign your name to a legal document, it matters.  The monetary disgorgement and the agreementrnwe have reached in this criminal case with DocX should remind allrnmortgage-services processers that our system of titling real property will bernheld to a standard of accuracy and truth expected by homeowners across therncountry.” </p

“I appreciate LPS takingrnresponsibility for the actions of its subsidiary, and for their agreeing torncooperate in our continuing criminal investigation of this matter.”

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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