(The following press release from the Delaware Attorney General's Office
was received by e-mail and was reformatted. The sender verified the statement.)
October 16, 2012
National Mortgage Services Company Will Pay Delaware $250,000
to Settle Robo-Signing Allegations
Wilmington - Delaware Attorney General Beau Biden announced today 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
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.
DocX prepared, notorized and filed mortgage-related documents for banks and
other companies that were acting as mortgage "servicers." In recent years, LPS
subsidiaries, including DocX, instituted questionable practices and procedures
that allowed LPS and its clients, the mortgage servicers, to process increasing
volumes of paperwork, driven by the rising tide of foreclosures, without
sufficient staff and other resources. Legal documents were signed en masse by
employees who were not authorized to do so, and notaries public improperly
certified the signing of the documents, even though they were executed outside
of their presence.
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 today's 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.
Jason P. Miller
Public Information Officer
Delaware Department of Justice
820 N. French Street, 6th Floor
Wilmington, DE 19801
(302) 893-8939 (cell)
(302) 577-6626 (fax)
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