State Joins $120 Million Multistate Agreement With Lender Processing Services

Thursday, January 31, 2013

Attorney General Bob Cooper on Thursday announced that Tennessee and 45 other Attorneys General have reached a $120 million multistate agreement with a national loan default servicing company and its subsidiaries.

Tennessee will receive approximately $2.3 million as a result of its complaint and agreed final judgment with Lender Processing Services, Inc. and its subsidiaries, LPS Default Solutions and DocX, which are being filed Thursday in Davidson County Circuit Court. 

The agreement resolves allegations that LPS, which primarily provides technological support to banks and mortgage loan servicers, was “robo-signing” documents and engaging in other improper conduct related to mortgage loan default servicing.  The judgment requires LPS and its subsidiaries to reform its business practices and, if necessary, to correct documents it executed to assist the homeowner. 

“This agreement with LPS is the next step in our ongoing efforts relating to mortgage servicing and the foreclosure process in Tennessee,” said Attorney General Cooper.  “It is important that the mortgage foreclosure process work as intended and Tennessee borrowers are able to rely on the accuracy of the documents used by LPS.”

Among other things, the judgment will require proper execution of documents and prohibit signature by unauthorized persons or those without first-hand knowledge of facts attested to in the documents, enhanced oversight of the default services provided, and a review of all third-party fees to ensure that the fees have been earned and are reasonable and accurate.  The agreement also accomplishes the following:

· Prohibits LPS (including DOCX) from engaging in the practice of surrogate signing of documents;

· Ensures that LPS has proper authority to sign documents on behalf of a servicer, if in fact it is signing documents;

· Requires LPS to accurately identify the authority that the signer has to execute the document and where that signer works;

· Prohibits LPS from notarizing documents outside the presence of a notary and ensures that notarizations will comply with applicable laws;

· Prohibits LPS from improperly interfering with the attorney-client relationship between attorneys and services;

· Prohibits LPS from incentivizing or promoting attorney speed or volume to the detriment of accuracy;

· Requires LPS to ensure that foreclosure and bankruptcy counsel or trustees can communicate directly with the servicer;

· Requires LPS to have enhanced oversight and review of processes over third parties it manages, including those entities that perform property preservation services;

· Prohibits LPS from imposing unreasonable mark-ups or other fees on third party providers’ default or foreclosure-related services;

· Requires LPS to establish and maintain a toll-free phone number for consumers concerning document execution and property preservation services (including winterization, inspection, preservation, and maintenance); and

· Requires LPS to modify mortgage documents that require remediation when LPS has legal authority to do so and when reasonably necessary to assist a consumer or when required by state or local laws.

In the judgment, LPS stipulates to significant facts uncovered in the investigation, including the practice by DocX of so-called “surrogate signing,” the signing of documents by an unauthorized person in the name of another and notarizing those documents as if they had been signed by the proper person, as well as other improprieties in the document execution and recordation or filing process.

As part of the agreement, LPS will undertake a review of documents executed from Jan. 1, 2008 to Dec. 31, 2010 to determine whether any documents need to be re-executed or corrected. If LPS is authorized to make the corrections, it will do so and will make periodic reports to the Attorney General of the status of its review and/or modification of documents. Consumers may also call the LPS toll-free number and request review and correction of any documents executed by LPS at any time.

 


Planning Agency Staff Recommends Denial Of Request For Doctors Office, Pharmacy On Shallowford Road

The Regional Planning Agency staff is recommending denial on a rezoning request for a doctors office and pharmacy at 7683 Shallowford Road. Wanda Threat is making the request. The staff said it is not in accord with the Land Use Plan. The approximately 1.2-acre site would only have access from Shallowford. The plan is to use an existing building for phase 1 and eventually ... (click for more)

8 Apartments, Commercial Space Planned At Corner Main Street, Central Avenue

A developer is proposing eight second-story apartments and 7,500 square feet of commercial space at the northeast corner of Main Street and Central Avenue. The site being developed by Richard Zavala is just over half an acre. The main entrance will be on Cemetery Avenue and secondary access through an alley. The two-story building will front both Central Avenue and East ... (click for more)

State's TNReady Testing Program Has "Severe Network Outage"; Testing To Be By Pencil And Paper

Tennessee Education Commissioner Candice McQueen said Monday afternoon that the state's TNReady testing program had suffered "a severe network outage." Commissioner Edwards said the testing will go on, but it will have to be done with pencil and paper. She sent this email to school directors across the state: Directors, Thank you for your patience as we faced technical ... (click for more)

Brandon Bettis, 25, Arrested For Home Invasion; 2 Other Suspects Being Sought

Brandon Bettis, 25, was arrested after a home invasion early Monday morning, and two other suspects are being sought. Chattanooga Police responded to the 1100 block of Thomas Lane at 6:30 a.m. on the report of a home invasion robbery.  The suspects entered the home of the victims, James Shrum, 47, and Hillary Schooley, 25.   The victims were wakened and threatened ... (click for more)

The City Failed To Watch The Chattanooga History Museum Dollars - And Response (3)

The tell tale signs of the History Museum's folly have been evident for years. When I was a former member of City Council I interviewed Dr. Daryl Black, Ph.D. to determine if I should argue for or against the annual funding of his organization. His interview, the multi-year history of administrative non-performance (despite consistent repetitive funding), and a review of the organizational ... (click for more)

Roy Exum: The Momma Bears Roar

If I could count Hamilton County’s best educators on one hand, Normal Park Elementary Principal Jill Levine would be the biggest finger. What she and her faculty and a dazzling commitment from both her students and parents have accomplished is an educational dream. I am told people literally move to North Chattanooga just so their children will be zoned for the award-winning school. ... (click for more)