A mortgage service company out of Florida will pay $5.76 million in penalties in Texas as part of a settlement agreement regarding their misconduct that contributed to homeowners defaulting on loans.
Texas joined 44 other states and the District of Columbia in a nationwide investigation into Lender Processing Service Inc. (LPS) and its subsidiaries because of unlawful mortgage servicing practices.
LPS will have to pay $120 million in penalties to the states and must “dramatically improve their loan servicing practices.”
“We are pleased that sorely needed reforms continue to improve every corner of the mortgage servicing industry such that prospective homeowners can feel secure in their decision to finance a home,” announced Texas Attorney General Greg Abbott.
The investigation examined misconduct by LPS and two of its subsidiaries – LPS Default Solutions and DocX.
The businesses perform operational and technical services for banks and residential mortgage lenders.
Evidence indicates LPS improperly “robo-signed” foreclosure documents that should have been performed by authorized officials who could attest to the alleged facts supporting foreclosure.
LPS also failed to actually research facts that were asserted in foreclosure documents and did not properly follow statutorily required procedures when executing foreclosure actions.
Documents revealed that LPS’ failure to comply with laws contributed to homeowners defaulting on loans and unnecessarily losing residences to foreclosure.
The settlement limits or prohibits LPS from the practice of “surrogate document signing
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