Alpharetta mortgage firm faces criminal charges in Missouri

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By Associated Press

For the AJC

COLUMBIA, Mo. -- Add Missouri to the growing list of states going after banks and other companies on behalf of consumers apparently caught in a widespread fraud involving forged signatures on phony home loan documents.

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In a Dec. 30, 2011 photo, Guilford Co., N.C., Register of Deeds Jeff Thigpen displays stacks of paperwork and samples of "robo-signed" signatures of banking officials as part of campaign to ensure property ownership in foreclosure. Thigpen has become a voice in the financial battle over alleged property document forgery.

The High Point Enterprise, AP Photo In a Dec. 30, 2011 photo, Guilford Co., N.C., Register of Deeds Jeff Thigpen displays stacks of paperwork and samples of "robo-signed" signatures of banking officials as part of campaign to ensure property ownership in foreclosure. Thigpen has become a voice in the financial battle over alleged property document forgery.

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State Attorney General Chris Koster filed criminal charges on Feb. 3 against DocX, a now-closed Alpharetta-based company accused of cutting corners to make more money by using fake "robo signatures" to speed up the processing of mortgages.

A Boone County grand jury issued a 136-count criminal indictment alleging felony forgery and false declarations, a misdemeanor offense, against the company and its former president, Lorraine Brown. DocX closed in 2010.

Koster joins his counterparts in states such as Massachusetts, which has sued five major banks over deceptive foreclosure practices; Nevada, which recently sued Lender Processing Services, a DocX holding company based in Jacksonville; and Illinois, where the state sued another mortgage processor last week for similar reasons.

Koster upped the ante in Missouri by deciding to seek criminal charges. If convicted, Brown faces up to seven years in prison for each count. DocX could be fined $10,000 for each forgery conviction and $2,000 for each false declaration.

Brown did not respond to a telephone message left at her Alpharetta home.

"The grand jury indictment alleges that mass-produced fraudulent signatures on notarized real estate documents constitute forgery," Koster said. The "indictment reflects our firm conviction that when you sign your name to a legal document, it matters."

The indictment lists 68 notarized deeds filed between April and July 2009 using the name of Linda Green, a former DocX employee. The Boone County recorder of deeds noticed dozens of discrepancies in 2011 "when the purported signer (of the deeds) was found not to have signed the deed of release (in front of) the notary public identified," the complaint says.

The Missouri case comes as the nation's five largest mortgage lenders continue to negotiate a settlement with federal and state officials that could reduce loans for more than 1 million homeowners nationwide.

The pool of available money could be as much as $25 billion if all states approve the deal and result in $2,000 checks to hundreds of thousands of people who lost homes to foreclosure. Another 1 million homeowners could see their unpaid principal on mortgages reduced by an average of $20,000.

That investigation follows the temporary suspension of foreclosures by major banks in October 2010 following revelations of fraudulent documents processed by banks

A St. Louis attorney representing DocX in the Missouri case did not respond to a request for comment. Nor did a Lender Processing Services spokeswoman. The Florida company is mired in at least one other major lawsuit, filed in August by American Home Mortgage Servicing, which used DocX to process its loans.

Lender Processing Services also signed an April consent order with the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the Office of the Comptroller of the Currency in which it pledged to change its loan processing procedures.