“For them to come in and refile new docs, that would bring in about $750,000 in revenue, but we can’t rely on the authenticity of those documents.That’s why I seek restitution to go out and get a forensic audit,” O’Brien said.
A fraudulent document in a chain of title puts a cloud over every subsequent valid property document, and could complicate homeowners trying to sell their property, refinance their mortgage or extract equity. Many of the fraudulent documents are mortgage assignments, which declares the sale of a mortgage from one company to another and can obscure what institution actually owns a given mortgage.
Lender Processing Services last week agreed to pay $120 million to settle allegations it “robosigned” documents and engaged in other improper conduct related to mortgage loan default servicing.
Massachusetts attorney general Martha Coakley and New Hampshire attorney general Michael A. Delaney joined 44 others in a consent judgment requiring Lender Processing Services and subsidiaries LPS Default Solutions and DocX to reform their business practices and, if necessary, correct documents they executed to assist homeowners.
LPS will pay nearly $1.6 million in fees and costs to Massachusetts and $457,961 to New Hampshire, which will be allocated toward enforcement costs and addressing the harm caused by the misconduct.
The consent 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.
Banks in 2010 slowed the pace of foreclosures, which peaked during the recession, after news reports of banks and subcontractors forging signatures and improperly notarizing foreclosure documents, including those detailing which institution actually owned a given mortgage.