LPS SEC 8-K Report | FDIC Slams Lender Processing Services, Inc. with $154,519,000 Lawsuit

Now that’s gotta sting!

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):
May 10, 2011

Lender Processing Services, Inc.

(Exact name of Registrant as Specified in its Charter)

001-34005
(Commission File Number)

ITEM 7.01. REGULATION FD DISCLOSURE

The Federal Deposit Insurance Corporation (“FDIC”), in its capacity as Receiver for Washington Mutual Bank (“WAMU”), filed a complaint on May 9, 2011 in the U.S. District Court for the Central District of California to recover alleged losses of approximately $154,519,000. The FDIC contends these losses were a direct and proximate result of the defendants’ alleged breach of contract with WAMU and alleged gross negligence of the defendants with respect to the provision of certain services by LPS’s subsidiary LSI Appraisal LLC, an appraisal management company. In particular, the FDIC claims that the services provided failed to conform with federal and state law, regulatory guidelines and other industry standards, including specifically the provisions of the Uniform Standards of Professional Appraisal Practice (“USPAP”). LPS previously described the possibility of this suit in its Form 10-Q filed May 5, 2011.

In its complaint, the FDIC cites, as the cause of the damages claimed, 220 appraisals performed between June 2006 and May 2008. However, for more than 75 percent of the appraisals identified by the FDIC, LSI was contracted only to provide reviews of appraisals, not to conduct the initial, full appraisals. For these properties, the full appraisals were provided by other entities, unrelated to LSI. For all appraisals subject to this complaint, LPS believes there is no basis for a claim that LSI engaged in “gross negligence” or breach of contract related to these appraisal services.

Appraisals are estimates of value provided by a licensed real estate appraiser. A review is an industry accepted methodology used to evaluate the data gathered by the appraiser to support the conclusions of the original appraisal report. A review, by definition, and as originally agreed to by LSI and Washington Mutual, is not a product to be used for assigning a value to a property, making a loan, determining the quality or creditworthiness of a borrower, or determining the viability of a borrower’s ability to repay a loan. It is also not an insurance policy against non-repayment of a loan or a substitute for appropriate lending practices.

LSI’s appraisal management process and its network of appraisers meet industry standards and undergo well-documented and rigorous evaluations that conform to the Uniform Standards of Professional Appraisal Practice (USPAP). LPS believes that any loan losses are not because of appraisal issues, but are due to the quality of underwriting by WAMU, borrowers defaulting and the weakness of the economy after the loans were made, among other factors.

LPS contends that the services LSI provided satisfied the terms and conditions of its contract with WAMU and were not performed with gross negligence. Due to the early stage of this matter, however, it is not possible to predict the outcome or the amount of possible loss, if any, that may result from this matter. LPS stands firmly behind the integrity of the services it provides to the mortgage industry and intends to vigorously defend itself against these allegations.

SOURCE: SEC

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4closureFraud.org

Federal Deposit Insurance Corporation v. LSI Appraisal, LLC. Fidelity National, Lender Processing Services

Comments
9 Responses to “LPS SEC 8-K Report | FDIC Slams Lender Processing Services, Inc. with $154,519,000 Lawsuit”
  1. l vent says:

    Make the criminals pay even if they are all guilty.

  2. John says:

    Enough,

    Most folks just move out and let their house in a subdivision be foreclosed on. Its too easy to wait until its sold or one just like it and rent or buy it for half the payment. Some buy one before they move out (walk away) into the new home and let the old one go back.

    Only a very small percentage, I heard under 5%, sue or protest the foreclosure and the banks know this. They are playing the percentages..If they have to pay you and give you money because you win your case against them, it is a small percentage against what they make on the others.

  3. C.D. says:

    I am going through a shell game with my loan keep selling and reselling it to each other. Latest service Nationstar Mortgage has sold my loan again even though there is an ongoing dispute. HOW CAN THEY GET AWAY WITH THIS? I NEED HELP, ANYONE??

  4. Enough says:

    DOesnt anyone but me think its strange that everyone is getting sued but the foreclosures continue?? I do not understand. music to my ears would be a utterly and complete mortitorium on foreclosures and ps dont count on any money for us did you here about the ag settlement no principle reductions even though there is fraud otherwise why would there be a settlement?

    • l vent says:

      Yes Enough and it is despicable. There should have been an indefinite nationwide moratorium by now. The robosigning scandal was the cover up for the larger scandal, the fraud at Origination, at the County Recorders office, in the whole of the loans and on the title to our homes. A man by the name of Robert Shear wrote a book entitled “The Great Stick-up of America”, He was on a talk radio show Michael Medved last summer and said there needs to be at least a 10 year moratorium on fraudclosures because of all of the rampant mortgage fraud and subsequent crimes. The problem is too many people still do not know the truth and they are getting away with this for as long as they can. I saw it first hand when I went to court last week for my own fraudclosure complaint. Only one other person questioned ownership, everyone else was either working on a loan mod or working on a short sale. It is hard to believe we all are living on the same planet sometimes. With the report coming out the other day that even more homes are under water I don’t think they are going to be able to carry on with this charade much longer. They will eventually have to reap what they have sown.

  5. J A says:

    Let’s just hope the FDIC does the right thing and gives all of us who were defrauded by LPS a piece of that action when they (FDIC) win this lawsuit and LPS has to pay.

  6. debi J says:

    I have been screaming about LPS for years now. Finally someone is doing something. Can u say ” open the big big can of worms”!? This is going to get good. If the SEC- is suing them I guess there’s some fraud ay?? Dig deep there’s lots of late night reading. Corelogic comes into play now as well as equifax and thousands of other affiliates and millions and millions of dollars of good will”. Let’s see– I’m going to the store now for popcorn and stringer reading glasses!! Deb

  7. Jason Werner says:

    Hmm, I wonder how much LPS will ask for in their counterclaim???

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