“Mail and Wire Fraud, Money Laundering, Conspiracy and Racketeering”

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U.S. probing foreclosure processing firms

By Ariana Eunjung Cha
Washington Post Staff Writer

The more banks foreclosed on homes, the more a little-known company in Florida called Lender Processing Services saw its revenue and stock price soar.

For a fee, the Jacksonville company would locate and assemble the documents necessary for a lender to foreclose on a borrower who defaulted on a mortgage. Working on behalf of the biggest names in the industry, including J.P. Morgan Chase, Bank of America and Citigroup, LPS says it handles more than half of all foreclosures in the country.

Now, amid reports of shoddy and possibly fraudulent paperwork, LPS as well as a handful of other document processors and law firms are coming under scrutiny for the criminal investigations into the foreclosure debacle.

Law enforcement authorities on both state and federal levels are probing whether individuals at these foreclosure companies and at the banks that hired them committed an array of possible crimes – mail and wire fraud, money laundering, conspiracy and racketeering. No charges have been filed.

These officials say they are taking a well-tested approach in their investigations: press low-level employees to implicate higher-up executives. Already, investigators have obtained in sworn testimony detailed descriptions of what took place inside the foreclosure companies.

Florida’s attorney general, Bill McCollum, said in an interview that “we know there are problems of great significance” at LPS. He added that one of the most important questions being asked is, “Does this involve the CEO” of a major bank?

“It’s way too early to tell whether the bigger financial institution had officers committing criminal fraud,” McCollum said. “It may be something that shows up, but it’s too early to say right now.”

LPS is fighting back against what it calls “misrepresentations” about the scope of its problems. It recently hired as consultants Tony Fratto, who was a spokesman for the George W. Bush administration, and Taylor Griffith, a former Treasury Department spokesman.

LPS spokeswoman Michelle Kersch on Monday said the company “is committed to providing authorities with any information that they need to better understand our business and the industry.” She declined to comment further.

Formerly a branch of Fidelity National Financial – the nation’s largest title insurer – LPS was spun off in 2008. It’s still housed in the same complex as the title company, in one of two twin 12-story buildings with expansive views of the Jacksonville waterfront. With 8,900 employees, it is one of the city’s largest employers.

Some homeowners contesting foreclosures have alleged that the firm’s employees forged signatures on paperwork that proves ownership of a loan. In other cases, the employees listed “Bogus Assignee” as the mortgage holder and “Bad Bene” as the borrower.

After The Washington Post reported in late September on several instances in which a single person’s signature on some foreclosure documents appeared to be scripted by different people, LPS admitted that a subsidiary called Docx in Alpharetta, Ga., improperly prepared some documents used for foreclosures. Company officials said that the paperwork problems were limited to filings made in 2008 and 2009 and that the division has since been shut down.

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4closureFraud.org

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I sure could use some…