Schuette Files Criminal Charges Against Former Mortgage Processor President for Role in Fraudulent Robo-Signing

LANSING – Michigan Attorney General Bill Schuette today announced he charged Lorraine Brown, former president of mortgage document processor DocX, with racketeering for her alleged role in authorizing the fraudulent signing of mortgage documents filed in Michigan.  The felony charge comes as the result of an ongoing Attorney General investigation into questionable mortgage documentation filed with Michigan’s Register of Deeds offices during the foreclosure crisis. 

 “Shortcuts like robo-signing are just one piece of the mortgage foreclosure crisis,” said Schuette.  “Our investigation remains ongoing, and we will bring to justice every lawbreaker we find.”

In April 2011, Schuette launched an investigation after county officials across the state reported that they suspected Assignment of Mortgage documents filed in their offices may have been forged.  A “60 Minutes” news broadcast had shown that the name “Linda Green” was signed to thousands of mortgage-related documents nationwide, but with many different variations in handwriting.  County officials in Michigan reviewed their files and found similar documents, thus raising questions about the authenticity of the documents filed.

As part of his investigation, Schuette reviewed documents filed in Michigan and prepared by DocX, a document processing company located in Georgia.  DocX processed mortgage assignments and lien releases for residential lenders and servicers nationwide.  Schuette’s investigation revealed that former DocX president Lorraine Brown, 51, of Alpharetta, Georgia, allegedly established and orchestrated a widespread scheme of “robo-signing,” a practice in which employees were directed to fraudulently sign another authorized person’s name on mortgage documents in order to execute these documents as quickly as possible.

Internally, DocX identified this practice as “facsimile signing” or “surrogate signing.”  Schuette alleges that from 2006 through 2009, these improperly executed documents were created and recorded at Brown’s direction.  Schuette’s investigation revealed that more than 1,000 unauthorized and improperly executed documents were filed with county registers of deeds throughout Michigan. 

Lorraine Brown has been charged with one count of Conducting Criminal Enterprises (Racketeering), a 20-year felony, in Kent County’s 61st District Court.  Arrangements are being made for Brown to surrender to Michigan authorities, and arraignment will be scheduled at a later date.

In 2010, DocX suspended operations, halting its work as a mortgage document processor.  Schuette noted that while the criminal charges against Brown address her role in the scheme, his office’s overall investigation into robo-signing remains ongoing and is not yet complete.

A criminal charge is merely an accusation, and the defendants are presumed innocent unless proven guilty.


Mortgage Settlement Brings Relief to Michigan Families

Earlier this year, Schuette joined 48 other state attorneys general in entering into a settlement with the five leading bank mortgage servicers. The settlement addresses allegations of faulty foreclosure processes and poor servicing of mortgages that harmed Michigan homeowners. The settlement also requires comprehensive reforms of mortgage loan servicing to improve customer service for Michigan borrowers.

On August 1, 2012, Governor Rick Snyder signed legislation to create the Homeowner Protection Fund.  The fund will be used to help avoid preventable foreclosures, alleviate the effects of the foreclosure crisis, support law enforcement activities to prevent or prosecute financial fraud or deceptive practices, and to compensate the state for costs resulting from unlawful conduct of the defendants in the lawsuit.

Current borrowers serviced by the banks may be eligible for loan modifications and other refinancing options.  Residents who went through foreclosure with the participating banks from 2008-2011 may be eligible for cash payments.  Within the last two months, more than 116,000 postcards and claim forms were mailed to Michigan borrowers who are eligible to file claims for cash payments, which are scheduled to be mailed in the first quarter of 2013.  

“Although we can never completely undo the damage caused by the foreclosure crisis, through this settlement, many Michigan families will finally begin to see some relief,” said Schuette.


The Homeowner Protection Fund will be used for the following eight initiatives:

  • Foreclosure Rescue Scam Victim Restitution – $7.5 million. Many Michigan residents have fallen prey to foreclosure rescue scam artists who offered to help citizens save their homes. This fund will provide restitution payments for victims of foreclosure scams. Eligibility criteria to determine qualifying cases are currently being developed by Schuette’s office.
  • Assistance for Veterans – $5 million. The men and women who served our country also have been affected by poor mortgage servicing and foreclosure practices. These funds will provide targeted relief for military service members unable to qualify for existing programs. The Michigan Department of Military and Veteran’s Affairs will be responsible for this program.
  • Michigan Attorney General Home Protection Unit – $6 million. These funds will allow the attorney general to ramp up investigation and prosecution of foreclosure-related crimes. This unit has convicted 27 individuals and companies since 2011. These funds will allow for additional investigators and prosecutors to combat foreclosure related crimes. 
  • Blight Elimination – $25 million. These funds will be dedicated to blight elimination efforts throughout Michigan. Detroit will receive $10 million for blight elimination in the city of Detroit and $15 million will be allocated for use throughout the rest of the state.
  • Foreclosure Counseling for Homeowners – $20 million. The Michigan State Housing and Development Authority (MSHDA) and Michigan State University Extension Offices will use these funds to expand their much-needed, free homeowner counseling services for citizens seeking to avoid foreclosure.
  • Housing and Community Development Programs – $3.7 million. These funds will be allocated to the Michigan Housing and Community Development Fund which develops and coordinates public and private resources to meet the affordable housing needs of low- income households and to revitalize downtown areas and neighborhoods in Michigan.
  • Grants to Help Homeowners Refinance – $5 million. These funds will allow MSHDA to provide grants to help pay the closing costs of citizens who use the Home Affordable Refinance Program. Eligible citizens will receive assistance paying closing costs associated with refinancing their home.  Homeowners will be able to begin applying for these funds by the end the year.
  • Assistance to Homebuyers – $15 million. These funds will assist both service members and non-service members by providing grants to offset the purchase price of a home.  Service members may be eligible for grants up to $5,000 and non-service members up to $3,000.  Eligibility criteria to determine qualifying cases will be established at a later date.  Homebuyers will be able to begin applying for these funds by the end the year.

More information on the 2012 Mortgage Settlement is available on the Attorney General’s Website at