When Banks Outsource Foreclosures, Nothing Good Happens
Lender Processing Service (LPS), is “the nation’s leading provider” of “default solutions” to mortgage servicers, meaning it manages every aspect of foreclosure, whether in bankruptcy or state court. However, LPS is facing investigations and lawsuits that challenge its existence because they focus on the legality of LPS’s basic business model.
It’s a Louisiana bankruptcy case involving a single foreclosure that best illustrates the problems with the banks’ outsourcing their mortgage default work to LPS or similar entities. During a bankruptcy, foreclosure is forbidden without the judge’s permission, so LPS is frequently involved in seeking that permission.
In that Lousiana case, involving the bankruptcy of Ron and La Rhonda Wilson, LPS is facing sanctions for allegedly committing perjury during a hearing held to find out why the bank — Option One — twice asked the bankruptcy court for permission to foreclose when the debtors were current on their mortgage. LPS insists it did not intend to mislead the court.
A Disturbing Picture
Although the U.S. Bankruptcy Trustee, which is the party asking for the sanctions, seems to have the stronger case if you read the motions at those links, the perjury issue isn’t central to my point here. In the detailed proceedings triggered by the wrongful requests to foreclose, a disturbing picture emerges of a thoroughly dysfunctional “legal” process between mortgage servicers and their LPS-network attorneys. As a result of that process — adopted by servicers to save themselves money — everyone else winds up paying.
See full article from DailyFinance: http://srph.it/dS31zH
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LPS, Trustees, MERS ,banksters, and the like or anyone trying to claim that they are owed money from a homeowner are just taking on new diguises. Kind of like the story I came across from the WSJ blog Deal Journal from 12/20/2010 entitled: Marshall & Ilsley’s Shotgun Marriage. It states in line 1, Bank of Montreal’s deal to acquire Marshall & Illsey has the feel of a shotgun wedding and sends a loud and clear message to U.S. regional banks-the Treasury Department wants its TARP money back. Now, why would Bank of Montreal be forced to merge with a U.S. bank unless they are trying to hide some more fraud? This is what they do time and time again in order to confuse and send everyone on a wild goose chase. F/K/A, A/K/A.. It’s like where’s Waldo? I would have to say the answer to that is at the Origination of all of the mortgage fraud, the FRAUDULENT INDUCEMENT OF OUR MORTGAGES, and who is responsible for the apparent dissapearance of all of the original blue ink notes that someone delivered to the Treas. after we paid off our homes to a second bank, which generated a paid deed for US, and collateral for them, so they could use our names as a poker chip in the Ponzi scheme they were all engaging in, up on Wall Street? Sorry, but when those ORIGINAL BLUE INK NOTES disappeared, they should never have been allowed to fraudclose on any homeowner’s. Those notes prove either that WE paid the debt off to a second banker or the mortgage debt never existed.
LPS, Trustees, MERS ,banksters, and the like or anyone trying to claim that they are owed money from a homeowner are just taking on new diguises. Kind of like the story I came across from the WSJ blog Deal Journal from 12/20/2010 entitled: Marshall & Ilsley’s Shotgun Marriage. It states in line 1, Bank of Montreal’s deal to acquire Marshall & Illsey has the feel of a shotgun wedding and sends a loud and clear message to
I understand the criticisms of this article being offered by others here. I have a couple (at least) of my own. At the same time this is probably the BEST mainstream article I have seen of both Fidelity/LPS and the Wilson case (which I’ve been following closely for the past 18 months).
As best I can tell the author, Abigail Field, has gotten many of the details correct and accurate. Because the case and story are both lengthy and large there have, by necessity, been some omitted.
But Ms. field also makes some comments that I find quite disturbing:
1) “…the perjury issue isn’t central to my point here.”
2) “…the key thing here is what the case reveals about the consequences of the banks’ outsourcing model.”
False swearing and perjury ARE the central and key issues here. A more direct description, and more accurate in my opinion, is telling lies to the court in order to steal peoples money and homes. The fact is these are criminal offenses. Period. And lives are destroyed as a result.
Shifting the focus away from these criminal acts, to something like “the banks’ outsourcing model,” or to issues and/or flaws in the internal processes or procedures of LPS, will give rise to the kind of toothless euphemisms that cause most peoples eyes to glaze over and will greatly diminish the awareness of what is being perpetrated upon millions of families, our system of justice (if it can really be called that anymore), and our society as a whole. As a result any punishment, or accountability, meted out by the courts will fall far short of what these acts truly require.
My suggestions:
1) Begin with recognition of the lies and theft.
2) Recognize that LPS has at least a 50% market share of default servicing (if there are 2,000,000 foreclosures filed in a given year means LPS is involved in at least 1,000,000 of them).
3) Recognize that the LPS internal processes and procedures do not simply allow for the errors (the lies) to inadvertently “slip through,” those processes and procedures actually create and cause the errors (the lies).
4) Recognize that LPS is fully aware of the criminal acts they are committing, and have been for some time. This is shown by LPS employees having been sanctioned for false swearing in more than one isolated case.
5) Recognize that LPS, banks they are providing services for, and the LPS network law firms they are executing documents for, are aware the individuals and documents make averments that are untrue.
The above point 5 is easily demonstrated. When affidavits of merit, or of military status and status of account, are provided in foreclosure cases they are, in almost all instances, prepared by the network law firms. These affidavits are then executed by an LPS employee and notarized by a notary also in the employ of LPS.
Similarly, when fraudulent assignments of mortgage are proffered as evidence in foreclosure cases, as false evidence really, these documents are often prepared in the offices of the LPS network law firms, then executed by an LPS employee and notarized by a notary also in the employ of LPS.
In some instances the fraudulent assignments of mortgage are prepared by the LPS network law firm and are then executed by an employee of that law firm and notarized by another employee of that same law firm.
6) LPS is aware, the banks are aware, the network law firms are aware. I cannot think of any clearer example of a criminal conspiracy. And in the past several years, with foreclosure filings at or near record levels, the instances of these criminal and conspiratorial acts goes easily into the several millions. So not only is this a criminal conspiracy it is also on a scale so massive, so vast, it is rather mind boggling.
7) In accordance with the above all of the perpetrators MUST be prosecuted for the criminal acts, and Racketeering charges MUST also be attached.
8) Any and all citizens that have been victimized by this criminal conspiracy MUST also be made whole.
Does anyone really believe focusing on the inefficiencies of internal procedures is the best perspective from which to approach this?
As a final thought I leave you with this antique Greek adage: “Though the boys throw rocks in jest the frogs still die in earnest.” So ultimately it doesn’t matter if they did it on purpose, or even if they were aware of what they were doing. They did it and people were hurt.
and….when homeowners get letters or emails and calls from employees saying they are Paralegals
when they are not they are people not trained well and are trained how their law firm wants them to
answer with pat answers . How about when the paperwork is done in Manila and the data entry people
have no clue what info they are entering and these law firms are in such a rush they are not checked properly then the Judge TRUSTS that the law firm is doing their job the judges in Florida are so corrypt ehat needs to happen is new Judges that are not just biding their time have to hear and really listen to cases peoples lives are at stake even when the robo signers stamped the documents they could care less every file was prejudged that
the homeowner was a deadbeat yes some were some had no mortgage though
Here we go again- since when is Option One a bank? The answer is, it isn’t. And that gives further credibility to the MSM distorting and obfuscating the truth from the public. I hate to see “bank-owned” property signs on properties, number one, because they are not bank-owned so it is a blatant lie in my face which I have to look at every day, number two, it gives the public the impression that the “bank” is owed money which is why they have foreclosed someone’s house, number three, the more this charade is perpetuated, the worse it gets. The signs should read: ” House for sale: mortgage pooled and sold to Fannie Mae, (collection rights only),homeowners crumpled under illegal predatory loan servicing,gave up, got divorced, kids separated, mortgage separated from note, making note unsecured debt, note sold 8x with no assignments from sellers to buyers creating clouded title, mortgage investors defrauded,while investment bank collected full payment of mortgage from PMI, Ambac,Mbia, Tarp, Talf,crosscollateralization, overcollateralization. Fraudulent and criminal appraisal of underlying mortgage notes by Moody’s, S&P, Fitch, bestowing AAA ratings on garbage assets. Feel free to make an offer” NOTE: if you live in NJ, you will note that the same ratings agencies who were bribed by the investment banks to bestow AAA ratings on fraudulently appraised liar’s loan mortgages, have as of 2/11 downgraded NJ credit rating from AA to AA-, making it tougher for NJ to borrow money or pay debt going forward. Write your representatives, tell them that you feel that the credit downgrade must be withdrawn, as the downgrade of one notch was done by lying thieves who have been berated in congressional hearings, but no one has been jailed.(yet)
Ian, you wrote a cool post : )
LPS has the same business model as fiserve and Fidelity and banktec as well…this goes so deep its incredible. FNS, FNIS, LPS..it keeps going and going and going. They have all of our personal information! No one cares about that right? Why are former walmart employees and people that live in trailer parks given access to all of our personal information? That’s only a tiny piece — if some one really wanted to shed some light on the blatant fraud start looking into LPS like you mean it. Go to the SEC- site and get into their annual reports. Go into Fidelitys annual report and FNS and LPS–. You will be shocked. Equifax…know them? They used to be fidelity. LPS are straight into the government– LPS does all the VA loans. For those of you who watched the Bryan Bly depositions in horror–know this — they send the info to the Treasury After they falsify the assignment and other docs with their optical technology. They are also in all the clerk of the court records! They (LPS) designed a system to enable the courts system to be able to record massive quantities of recordings in seconds. It also allows them to duplicate any document from any person in any transaction from any bank with this technology… Thanks for that. Is any one listening? God I wish I could be an investigator for the People – by the people– this is not hard to solve at all. The problem is; someone has to want to. Debi