Delaware Attorney General Beau Biden announced that an investigation by his office into allegations of “robo-signing” and other improper mortgage services provided by subsidiaries of Lender Processing Services, Inc. (LPS) has led to the Florida-based company paying $250,000 to the State of Delaware.
An agreement between Biden’s office and LPS resolves claims that LPS subsidiaries, including DocX LLC, engaged in practices known as “robo-signing” and “surrogate-signing” when preparing and executing mortgage-related documents, some of which were ultimately filed with county Recorder of Deeds offices throughout Delaware in 2008 and 2009.
“Our home mortgage system only works when everyone – homeowners, banks, and the vendors they employ – plays by the rules,” Attorney General Biden said. “The improper verification and notorization of mortgage-related documents filed with Recorders of Deeds offices calls into question the integrity of our land recordation system and the system of private property rights that have been the cornerstone of our society for centuries. Today’s agreement helps ensure that these legal documents are what they purport to be and that they can be relied upon.”
Tuesday’s settlement is the latest development in Biden’s response to the housing crisis. Earlier this year, his office secured $45 million for Delaware in a settlement between the five largest mortgage servicing banks, state attorneys general and the federal government, and this summer his office secured important homeowner-protection reforms in a settlement with Mortgage Electronic Registry Services Inc.
The Attorney General’s investigation revealed that some of these improperly prepared documents were subsequently filed in Recorders of Deeds offices in Delaware’s three counties. LPS and its subsidiaries earned approximately $60,000 in revenue from their Delaware activities during the timeframe covered by the settlement.
As part of the settlement, LPS will report to Biden’s office quarterly regarding the status of their compliance with a separate federal consent decree. As part of this separate decree, LPS has, among other things, submitted to an independent review of its activities and will prepare a remediation plan to make restitution if the review finds evidence of financial harm. LPS also agreed in today’s settlement to work with the Attorney General to address any additional issues arising out of the covered conduct that affect or may affect Delaware residents.
The settlement provides for a payment of $150,000 to the State in lieu of penalties and reimbursement of $100,000 for fees and costs of investigation.
