By Jonathan Stempel
Feb 15 The mortgage servicing company Lender
Processing Services Inc has agreed to pay $35 million to
resolve a federal criminal investigation into foreclosure fraud,
the U.S. Department of Justice said on Friday.
The settlement resolves allegations over the Jacksonville,
Florida-based company's involvement in what the government
called a six-year scheme to prepare and file more than 1 million
fraudulently signed and notarized mortgage documents in property
recorders' offices nationwide.
It followed a guilty plea last November by Lorraine Brown,
the former chief executive of LPS' DocX LLC unit, to a felony
charge of conspiracy to commit mail and wire fraud over the
scheme, which ran from 2003 to 2009.
LPS entered into a two-year non-prosecution agreement that
requires it to meet many conditions, including cooperating in
federal probes, and alert the government to any abuses in
mortgage or foreclosure documentation services at the company.
The $35 million payment includes criminal penalties and
forfeiture and must be made within 10 days to the U.S. Marshals
Service and the U.S. Treasury, the Justice Department said.
An LPS spokeswoman did not immediately respond to requests
Foreclosure abuses became notorious in 2010 as borrowers,
politicians and regulators accused banks and mortgage companies
of pursuing foreclosures that were based on defective or
Many documents were found to have been signed systematically
without being read, through a process known as "robo-signing."
In February 2012, five large U.S. lenders agreed to a $25
billion settlement with regulators across the country to end
probes into foreclosure abuses.
Shares of LPS closed Friday down 17 cents at $25.09 on the
New York Stock Exchange. The settlement was announced after U.S.