Last week, various news outlets revealed that Federal banking regulators had issued consent orders against major servicers, MERS, and LPS. Kate Berry of American Banker pointed out that LPS is exposed to making payments to servicers:
In addition to the 14 biggest mortgage servicers, two of the biggest vendors to the industry received cease-and-desist orders from regulators Wednesday. One was stronger than the other.
Lender Processing Services Inc. and Merscorp Inc.’s Mortgage Electronic Registration System were both cited for “significant compliance failures” and “unsafe and unsound business practices” related to foreclosures. Regulators are requiring both companies to hire independent consultants, take remedial steps to address past failures and hire additional staff.
But only LPS, a publicly traded company in Jacksonville, Fla., that provides foreclosure-related services to banks, faces the possibility of having to reimburse servicers and borrowers if an independent review finds anyone was financially harmed by its failure to properly execute mortgage documents.
In a Securities and Exchange Commission filing, the company noted that “the order does not make any findings of fact or conclusions of wrongdoing, nor does LPS admit any fault or liability.” The filing said the agencies “have not yet concluded their assessment of whether any civil money penalties may be imposed.” LPS shares fell 3%, to $30.19 each.
In re Harris – Northern District of Florida Bankruptcy Court Filing v. LPS, LPS Default Solutions and Ben-E...
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