LPS Offers Clarification On WSJ Report

Posted by Orb Staff on April 06, 2010 No Comments
Categories : Mortgage Servicing

Lender Processing Services Inc. (LPS) has issued a clarification regarding an article published Monday by the Wall Street Journal.

The report, ‘U.S. Probes Foreclosure-Data Provider,’ placed a spotlight on LPS' recent Form 10-K, in which the company reported that a class-action complaint alleging Fair Debt Collections Practices Act violations had been filed against it.

In the single-count complaint, filed in February in the U.S. District Court for the Southern District of Florida, the plaintiffs seek to recover damages relating to the preparation and use of assignments of mortgage in foreclosure actions, according to the Securities and Exchange Commission filing.

LPS' 10-K goes on to explain that, during review of subsidiary Docx's business processes, LPS had identified a business process that caused an error in the notarization of certain documents, some of which were used in foreclosure proceedings in various jurisdictions around the country.

"The complaint essentially alleges that the industry practice of creating assignments of mortgages after the actual date on which a loan was transferred from one beneficial owner to another is unlawful," the 10-K says. "The complaint also challenges the authority of individuals employed by our document solutions subsidiary to execute such assignments as officers of various banks and mortgage companies. Although we do not believe that our conduct falls under the provisions of the Fair Debt Collection Practices Act, at this early stage, we are unable to accurately predict the outcome of this matter."

In its clarification to the WSJ article, LPS says it immediately corrected the business process and has completed the remedial actions necessary to minimize the impact of the error.

As stated in the company's Form 10-K, the U.S. Attorney's office for the Middle District of Florida is reviewing the business processes of Docx. LPS says it will cooperate fully with the U.S. Attorney's review.

SOURCE: Lender Processing Services

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