Schuette Is Mute About Pursuing Campaign Contributors Who Did The Same Thing
Steve Dibert, MFI-Miami
On Thursday, Lender Processing Services along with its subsidiaries, LPS Default Solutions and DocX reached a multi-state settlement to resolve allegations of unlawful foreclosure practices and robo-signing for $121 million. The agreement stipulates that LPS and its subsidiaries to reform their business practices and, if necessary, to correct documents it improperly executed that harmed homeowners.
As part of the settlement, LPS admitted that DocX committed so-called “surrogate signing,” which is a softer way of admitting to “robo-signing”. Robo-signing which is the signing of documents by unauthorized individuals in the name of another and notarizing those documents as if they had been signed by the proper person.
The settlement prohibits unauthorized persons or those without first-hand knowledge of the facts signing documents that attesting they do. The agreement enhances oversight and requires a review of all third-party fees to ensure that the fees have been earned and are reasonable and accurate. The settlement also:
- Prohibits LPS (including DOCX) from engaging in the practice of “surrogate signing” of documents;
- Ensures that LPS has proper authority to sign documents on behalf of a servicer, if in fact it is signing documents;
- Requires LPS to accurately identify the authority that the signer has to execute the document and where that signer is employed;
- Prohibits LPS from notarizing documents outside the presence of a notary and ensures that notarizations will comply with applicable laws;
- Prohibits LPS from improperly interfering with the attorney-client relationship between attorneys and services;
- Prohibits LPS from incentivizing or promoting attorney speed or volume to the detriment of accuracy;
- Requires LPS to ensure that foreclosure and bankruptcy counsel or trustees can communicate directly with the servicer;
- Requires LPS to have enhanced oversight and review of processes over third parties it manages, including those entities that perform property preservation services;
- Prohibits LPS from imposing unreasonable mark-ups or other fees on third party providers’ default or foreclosure-related services;
- Requires LPS to establish and maintain a toll-free phone number for consumers concerning document execution and property preservation services (including winterization, inspection, preservation, and maintenance); and
- Requires LPS to modify mortgage documents that require remediation when LPS has legal authority to do so and when reasonably necessary to assist a consumer or when required by state or local laws.
Michigan Attorney General Bill Schuette was overjoyed that Michigan was getting $2.5 million for doing virtually no work in combating robo-signing or mortgage fraud. As he did in November when he was one of the last of the state Attorneys Generals to bring charges against LPS’s now defunct DocX subsidiary and it’s founder Lorraine Brown who law enforcement and and LPS claim were pulling the strings at DocX.
According to the Lansing State Journal, Joy Yearout, spokeswoman for Schuette, said “Brown has not been arraigned but the office would continue to seek prosecution.”
Schuette also did not comment about two of his major campaign contributors, David Trott and Linda Orlans whose law firms are engaged in the same robo-signing practices as DocX and have also hired DocX in the past.
He did publicly say,
“Shortcuts like robo-signing are just one example of the damage caused by the mortgage foreclosure crisis. Our investigation into questionable mortgage practices remains ongoing, and we will bring to justice every lawbreaker we find.”