ATTORNEY GENERAL ANNOUNCES $1.8M SETTLEMENT WITH LENDER PROCESSING SERVICES OVER MORTGAGE LOAN SERVICES DOCUMENT PREPARATION

DENVER–Colorado Attorney General John Suthers today announced that the State of Colorado will receive $1.8 million as part of a settlement with Lender Processing Services, Inc. (NYSE: LPS) for past document execution practices by LPS subsidiaries DocX, LLC and LPS Default Solutions, Inc. Florida-based LPS provides technology and other services to mortgage loan servicers.

During a period from January 1, 2008 to December 31, 2010, certain residential mortgage loan servicers authorized specific persons employed by LPS subsidiaries DocX and LPS Default Solutions to sign or assist with the execution of mortgage-related documents, including lost instrument affidavits, deed of trust lien releases, and assignments of deeds of trust. Some of the mortgage -related documents generated or executed by LPS subsidiaries contained defects such as unauthorized signatures and improper notarizations.

“This settlement with LPS is part of our on-going investigation into all facets of the foreclosure process in Colorado,” said Suthers. “It is important that the foreclosure process work as intended and that borrowers and the legal system have confidence in it.”

Between March 1, 2009 and November 1, 2009, employees and agents of DocX were directed by management of DocX to implement a program under which some DocX employees signed mortgage-related documents in the name of other DocX employees, who were or had been at one time authorized to sign on behalf of certain mortgage servicers. DocX referred to these signers as “surrogate signers,” who then executed certain mortgage-related documents in the name of other DocX employees without indicating that the document had been signed by a surrogate signer.

As part of the settlement, LPS and its subsidiaries agree not to engage in any surrogate signing program or execute any mortgage-related documents without an affiant’s review and personal knowledge of the accuracy and completeness of the statements in the documents. LPS and its subsidiaries also will ensure that any mortgage-related document that is executed on behalf of a servicer is done pursuant to proper and verifiable authority to sign on behalf of the servicer.

The settlement funds will be used for programs related to foreclosure prevention, loan modification and housing, to reimburse the Colorado Attorney General’s Office for its attorney fees and costs, and for future consumer protection and antitrust enforcement and education efforts in the state.

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