Action Date: April 4, 2010 Location: Jacksonville, FL
In the first 3 days of April, 2010, the Wall Street Journal and the Jacksonville Business Journal both reported that Lender Processing Services was the subject of a federal criminal investigation involving a subsidiary company, Docx, LLC in Alpharetta, Georgia. A representative of the company reportedly acknowledged the investigation. Foreclosure defense blogs, and this website, have reported some of the problems with mortgage assignments prepared by Docx including Assignments where the grantor or grantee was described as “Bogus Assignee for Intervening Asmts” or “A Bad Bene.” Docx also produced many assignments with an effective date of 9/9/9999. In other cases, the effective date was listed as 1950. Other Assignments listed the amount of the original mortgage as $.00 or $.01. Still other assignments were missing signatures. The Docx office has produced over one million mortgage assignments in the last few years and filed these assignments in recorders’ offices across the country. How many Assignments were defective? Did any foreclosures occur based on the defective documents? Were court clerks notified of the defective assignments? Were borrowers notified? Were mortgage companies and banks notified? The company disclosures to date raise even more questions regarding the role of document mills in the national foreclosure crisis. Courts and litigants everywhere will be waiting for more complete disclosures.
CHICAGO (Reuters) – A unit of Lender Processing Services Inc, a U.S. provider of paperwork used by banks in the foreclosure process, is being investigated by federal prosecutors, the Wall Street Journal reported on Saturday.
Citing people familiar with the matter, the newspaper said a government probe into the business practices of the LPS unit was “criminal in nature.” According to the report, the probe was disclosed in LPS’s annual report in February.
The subsidiary being investigated is Docx LLC, which processes and sometimes produces documents used by banks to prove they own mortgages, the report said.
According to the report, among Docx documents being reviewed was one that incorrectly claimed an entity called “Bogus Assignee” was the owner of the loan.
The report cited LPS spokeswoman Michelle Kersch as saying that the “bogus” phrase was used as a placeholder and that some documents had been “inadvertently recorded before the field was updated.”
Keep in mind this is only on the Georgia Subsidiary “DocX” mean while back at the ranch in Minnesota much, much, much more fraud has been created see the videos below.
A subsidiary of a company that is a top provider of the documentation used by banks in the foreclosure process is under investigation by federal prosecutors.
The prosecutors are “reviewing the business processes” of the subsidiary of Lender Processing Services Inc., based in Jacksonville, Fla., according to the company’s annual securities filing released in February. People familiar with the matter saythe probe is criminal in nature.
Michelle Kersch, an LPS spokeswoman, said the subsidiary being investigated is Docx LLC. Docx processes and sometimes produces documents needed by banks to prove they own the mortgages. LPS’s annual report said that the processes under review have been “terminated,” and that the company has expressed its willingness to cooperate. Ms. Kersch declined to comment further on the probe.
A spokesman for the U.S. attorney’s office for the middle district of Florida, which the annual report says is handling the matter, declined to comment.
The case follows on the dismissal of numerous foreclosure cases in which judges across the U.S. have found that the materials banks had submitted to support their claims were wrong. Faulty bank paperwork has been an issue in foreclosure proceedings since the housing crisis took hold a few years ago. It is often difficult to pin down who the real owner of a mortgage is, thanks to the complexity of the mortgage market.
During the housing boom, mortgages were originated by lenders, quickly sold to Wall Street firms that bundled them into debt pools and then sold to investors as securities. The loans were supposed to change hands but the documents and contracts between borrowers and lenders often weren’t altered to show changes in ownership, judges have ruled.
That has made it hard for banks, which act on behalf of mortgage-securities investors in most foreclosure cases, to prove they own the loans in some instances.
LPS has said its software is used by banks to track the majority of U.S. residential mortgages from the time they are originated until the debt is satisfied or a borrower defaults. When a borrower defaults and a bank needs to foreclose, LPS helps process paperwork the bank uses in court.
LPS was recently referenced in a bankruptcy case involving Sylvia Nuer, a Bronx, N.Y., homeowner who had filed for protection from creditors in 2008.
Diana Adams, a U.S. government lawyer who monitors bankruptcy courts, argued in a brief filed earlier this year in the Nuer case that an LPS employee signed a document that wrongly said J.P. Morgan Chase & Co. had owned Ms. Nuer’s loan.
Documents related to the loan were “patently false or misleading,” according to Ms. Adams’s court papers. J.P. Morgan Chase, which has withdrawn its request to foreclose, declined to comment.
Linda Tirelli, a lawyer for Ms. Nuer, declined to comment directly on the case.
Ms. Kersch said LPS didn’t actually create the document and that the company’s “sole connection to this case is that our technology and services were utilized by J.P. Morgan Chase and its counsel.”
While the majority of foreclosures go unchallenged, some homeowners have won the right to keep their homes by proving the bank couldn’t show, on paper, that it owned the mortgage.
Some lawyers representing homeowners have claimed that banks routinely file erroneous paperwork showing they have a right to foreclose when they don’t.
Firms that process the paperwork are either “producing so many documents per day that nobody is reviewing anything, even to make sure they have the names right, or you’ve got some massive software problem,” said O. Max Gardner, a consumer-bankruptcy attorney in Shelby N.C., who has defended clients against foreclosure actions.
The wave of foreclosures and housing crisis appears to have helped LPS. According to the annual securities filing, foreclosure-related revenue was $1.1 billion last year compared with $473 million in 2007.
LPS has acknowledged problems in its paperwork. In its annual securities filing, in which it disclosed the federal probe, the company said it had found “an error” in how Docx handled notarization of some documents. Docx also has processed documents used in courts that incorrectly claimed an entity called “Bogus Assignee” was the owner of the loan, according to documents reviewed by The Wall Street Journal.
Ms. Kersch said the “bogus” phrase was used as a placeholder. “Unfortunately, on a few occasions, the document was inadvertently recorded before the field was updated,” she said.
and this is their video of the Minnesota Branch where they worry about “security”. I wonder if Christina Allen, Topako Love, Eric Tate, Laura Hescott were in this video?? Listen towards (4:41), they use “Delivery” or “Destruction“.
LPS statement “Technical Error” how about “HUMAN Robo-Signors FORGING, FABRICATING ERROR” to many tens-of- thousands (possibly in the miilions) of Assignmnet FRAUD “errors”. Preparing Docs in one state, Executing them in another and Notarizing in another? How about the signatures not matching the people who are signing? What about the folks in Minnesota where most of these were signed?
Jacksonville Business Journal – by Rachel Witkowski Staff reporter
The U.S. Attorney’s Office in Tampa is investigating a subsidiary of Lender Processing Services Inc. that processes mortgage documents for lenders.
Jacksonville-based company (NYSE: LPS) stated in its 2009 annual report that the U.S. Attorney’s Office of the Middle District of Florida recently began inquiring about the business processes of a subsidiary, DOCX LLC, based in Alpharetta, Ga.
LPS also acknowledged that there was an “error” in DOCX’s business processes and LPS immediately corrected it, according to the annual report filed with the U.S. Securities and Exchange Commission.
“We have representatives speaking with the U.S. Attorney’s Office and we are cooperating with all inquiries made by the U.S. Attorney’s Office,” said Michelle Kersch, LPS’ senior vice president of marketing and corporate communications, in an e-mailed response. “We changed the business process that created the technical error, provided additional training to our employees and corrected documents.”
The U.S. Attorney’s Office declined to comment on its investigation.
Kersch said LPS was contacted by the U.S. Attorney’s Office in February. That same month, another investigation by the Clerk of Superior Court in Fulton County, Ga. into DOCX had closed without taking any further action, officials said.
LPS has become a dominant player in the mortgage servicing market since it spun off from Fidelity National Information Services in July, 2008. LPS serviced about 70 percent of the non-performing loan market and 40 percent of foreclosed loans nationwide as of Dec. 31, according to LPS’ latest “mortgage monitor” report.
LPS increased revenue to nearly $2.4 billion in 2009 and recently announcing it will add 350 jobs through 2011. The Jacksonville Economic Development Commission has recommended nearly $3 million in city and state incentives for LPS to add those jobs in Jacksonville.
More to come…
Sample of their work “in-house” Minnesota…not only Alpharetta, GA
I’ve said it before and I’ll say it again, the attorneys at Ice Legal may be the most aggressive and hard charging Foreclosure Fraud Fighters in Florida. When this whole system comes crashing down and when judges and the Florida Supreme Court put an end to the systemic abuses of the court process being perpetrated by the foreclosure mills, the attorneys at Ice Legal will rightly take their fair share of the credit.
Attached here is a must read Motion along with a copy of a transcript from a hearing held in a Volusia County Courtroom. The Motion lays out a very disturbing set of allegations…
This is a foreclosure action filed by WELLS FARGO BANK, NA (the “BANK”). The BANK is represented by Florida Default Law Group, P.L. (“FDLG”). On behalf of the BANK in this case, and on behalf of other clients in other cases, FDLG filed affidavits to establish that the attorneys’ fees it was allegedly paid were reasonable. The affidavits purport to have been executed by Lisa Cullaro, the appointed expert on attorneys’ fees. The notary who allegedly administered the expert’s oath and vouched for her signature was Erin Cullaro, a former employee of FDLG and now an Assistant Attorney General in the Economic Crimes Division of the Office of the Attorney General.
Not only was Erin just a former employee, she was one of the lead counsel for Michael Echeverria, the owner of FDLG (Florida Default Law Group)
The information herein should not be taken as legal advice and is not a substitute for the assistance of a licensed advisor.
I AM NOT AN ATTORNEY.
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