Georgia is part of a multistate settlement announced Thursday with the parent company of an Alpharetta firm accused of widespread “robosigning” of foreclosure-related documents.
Georgia and 44 other states plus the District of Columbia came to terms on a settlement of more than $120 million with Jacksonville, Fla.-based Lender Processing Services, parent of defunct metro Atlanta mortgage document processor DocX.
Georgia stands to receive about $4.1 million as part of the settlement, which will go into the state’s general fund.
“LPS and its subsidiaries, including Georgia-based DocX, engaged in widespread fraud involving mortgage related documents,” Georgia Attorney General Sam Olens said in a news release. “This multistate settlement holds LPS accountable for past actions and puts new requirements in place to prevent future misconduct.”
Though some other states and the federal government have pursued criminal action against the company’s former CEO, Lorraine Brown, Georgia has not. Olens’ office has said it has no jurisdiction over the fraudulent foreclosure documents filed before mid-2012, though local district attorneys do.
LPS previously settled with Missouri, Delaware and Colorado, and LPS CEO Hugh Harris said in a news release his firm “look(s) forward to favorably resolving our remaining regulatory and legal issues in the near future.”
As part of the settlement, LPS is required to review documents its affiliates filed from 2008 to 2010 to determine if any need to be corrected.
DocX processed paperwork for lenders and mortgage servicers, including documents known as “assignments” that are used in the foreclosure process.
Employees often signed thousands of documents per day, according to federal court records. A “60 Minutes” investigation in 2011 found that multiple people signed the name “Linda Green” on documents created by DocX for more than a dozen financial institutions and mortgage servicers.
In the so-called “robosigning” scandal, slipshod handling of paperwork occurred when loans were made during the housing boom, sold between investors and ultimately foreclosed on when the economy crashed.
Borrower advocates say bogus foreclosure-related documents and cancellations of mortgages are filed in courthouses across the nation, including in Georgia.
Federal court records show DocX also produced documents claiming that crucial mortgage documents were lost but a mortgage company had a right to foreclose. The company charged fees up to $15 per document, court records say, depending on the service, and generated $60 million revenue from its document business from 2003 to 2009.
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