The U.S. Bankruptcy Court for the Eastern District of Louisiana will sanction Lender Processing Services (LPS: 31.19 -0.89%) after an employee at the firm was found to have improperly signed a court affidavit that put a nondefaulted borrower in line for foreclosure.
Ron and LaRhonda Wilson were current on their mortgage and making payments under a court-approved Chapter 13 bankruptcy plan when Option One Mortgage Co., their loan servicer, attempted to foreclose in early 2008 by filing a series of motions with the court.
The U.S. Trustee, a U.S. Department of Justice unit responsible for overseeing the administration of bankruptcy cases, eventually intervened in the dispute and last December asked the Louisiana court to sanction LPS for what it said was the firm's misrepresentation of payments received, but not properly posted to the borrower's account.
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