Attorney General Madigan
awards $3.3M to county recorders from settlement with 'robo-signing'
firm
Funds distributed from national
settlement with Lender Processing Services for faulty practices
against homeowners in foreclosure
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[April 25, 2013]
CHICAGO -- Attorney General Lisa
Madigan announced on Wednesday the distribution of $3.3 million to
Illinois county recorders from the national settlement with Lender
Processing Services Inc., or LPS. The settlement resolved
allegations that the Jacksonville, Fla.-based firm engaged in
pervasive "robo-signing" of mortgage documents and other faulty
practices while servicing loans of homeowners at risk of
foreclosure.
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Madigan and 45 other attorneys general reached the settlement in January
following an extensive investigation into LPS and its subsidiaries, LPS Default
Solutions and DocX, all of which primarily provide support to banks and mortgage
loan servicers. The attorneys general alleged that LPS and its subsidiaries
engaged in widespread "robo-signing" of mortgage documents, many of which were
filed in county recorders' offices. The states' investigation revealed a
practice by DocX of "surrogate signing," or the signing of documents by an
unauthorized person in the name of another and notarizing those documents as if
they had been signed by the proper person.The settlement requires that LPS
reform its business practices and includes prohibiting LPS from signing off on
mortgage documents with signatures of unauthorized people or people without
firsthand knowledge of facts attested to in the documents.
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As part of the settlement, LPS paid $3,364,326 to Illinois for equitable
distribution. Madigan said all of the money will be distributed to Illinois' 102
county recorder offices.
"LPS and its subsidiaries demonstrated an utter disregard for accuracy and
fairness in verifying key mortgage documents," Madigan said. "The settlement
holds LPS accountable for its unlawful actions and will provide added resources
to Illinois' county recorders to enhance their efforts in maintaining accurate
public records."
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The LPS settlement and subsequent funding distribution are part of
Madigan's ongoing effort to address the misconduct that contributed
to the financial crisis. The settlement holds lenders and other
financial institutions accountable for their unlawful practices,
while providing relief and assistance to Illinois families
struggling to save their homes as a result of the foreclosure
crisis.
Madigan took a lead role in the February 2012 national
foreclosure settlement, in conjunction with other states, the U.S.
Department of Justice, and the U.S. Department of Housing and Urban
Development. The settlement with five of the nation's largest banks
-- Bank of America, JPMorgan Chase, Wells Fargo, Citibank and
GMAC/Ally -- addresses allegations of widespread "robo-signing" of
foreclosure documents and other fraudulent practices while servicing
loans of struggling homeowners. As part of that $25 billion national
settlement, Illinois borrowers already have received more than $1.4
billion in direct relief.
[Text from file received from the office
of
Illinois Attorney General Lisa
Madigan]
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