When it rains, it pours for the Jacksonville, Florida based Lender Processing Services Inc. Lender Processing Services, Inc, (LPS) provides mortgage and foreclosure processing services for financial institutions. Currently, LPS has been under investigation for several months by federal and state authorities over allegations that one of its subsidiaries, Alpharetta, Ga.-based Docx LLC, has falsified documents used in foreclosure proceedings.
Most of the instant filing of foreclosure documents was mostly prepared by clerical workers and not lawyers. LPS faces the same dilemma in alleged falsifying documents as the major banks are accused of using robo-signers or bank hires with little to no experience that processed and signed foreclosure documents without verification.
Also, LPS faces lawsuits that allege that the company engaged in illegal fee-splitting arrangements with law firms in exchange for referrals in bankruptcy and foreclosure cases. The company denies these allegations and said that when it discovered potential problems with the foreclosure documents that it shut down the DocX operation.
Well, the latest bombshell follows with a 325 page deposition of LPS employee Bill Newland. Here is an excerpt of Mr. Newland's deposition obtained by by Stopforeclosurefraud website.
EXCERPTS:
2 Q Sure. Are there any attorneys who are not
3 members of the Fidelity — or the LPS attorney network
4 who can access your Process Management system?
5 A Not that I’m aware of.
6 Q And is it a fact that the only attorneys who
7 are using Process Management are attorneys who have
8 signed a referral agreement with LPS?
9 A That would be correct.
10 Q So, while your clients are free to choose
11 whomever as a foreclosing attorney, if they are an MSP
12 user and they are an LPS — they have an LPS agreement
13 with you for Default Solutions, the only attorneys
14 available on LPS system are attorneys who have signed
15 a contract with LPS?
16 A That have signed a contract with LPS, yes.
3 Q So I just want to be sure. What you’re
4 testifying to is that there is no compensation ever
5 paid by the servicer to LPS Default Solutions for all
6 this work that it does on behalf of the servicer with
7 respect to the foreclosure?
8 A No.
9 Q There is compensation or there is not
10 compensation?
11 A No, there’s no compensation.
12 Q Is it your testimony then that the only fees
13 which LPS Default Solutions collects with respect to
14 the foreclosure of any given loan is the
15 administrative support fee charged to the network
16 attorneys?
17 A Yes.
18 Q And the division of LPS Default Solutions
19 which we are here about today and which you are
20 testifying as a 30(b)(6) representative, the only
21 source of income it derives for its work with respect
22 to foreclosure is the administrative support fee?
23 A That’s my understanding.
Mr. Newland just gave such damning information that I find it real hard for Lender Processing Service to defend this damaging information. The real question is: Will more shoes drop for LPS?
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