Lender Processing Service Gets Caught Committing Fraud

by

The Bankruptcy Law Network has posted an article that discusses how LPS (formerly named Fidelity National Default Solutions), which is responsible for nearly half of all mortgages in the US, had an “epidemic of forged mortgage documents” for April…and the month isn’t even over yet.

The article mentions one employee in particular- Ms. Linda Green. Ms. Green is the vice president of 20 banks and is “super human” in that she can single handedly process thousand of mortgage assignments in a single day. But it turns out she wasn’t so super human, but rather about a dozen other LPS employees were signing her name on thousands of valuable documents that were used to foreclose on homes. The documents with her forged signature were then notarized by other employees, feeling that it added an “authentic touch.”

Also in April, the Federal Reserve ordered all mortgage servicers to re-evaluate their foreclosure procedures and if fault was found they were to reimburse the damaged homeowners.

LPS and the other dirt-bag mortgage servicers – including Citibank, Bank of America, JPMorgan Chase and Wells Fargo – signed Consent Orders agreeing to change their evil ways and come clean. But in typical LPS double-speak fashion, an LPS representative responded to the consent order by stating, “The Order does not make any findings of fact or conclusions of wrongdoing, nor does LPS admit any fault or liability.”

A federal bankruptcy judge has used a former LPS employee’s testimony to show that the company has adopted fraud as a regular business practice.

Ms. Dory Goebel was a LPS employee who was caught posing as the Assistant Secretary for Option One Mortgage Corporation and had filed an Affidavit in a bankruptcy case to allow LPS to foreclose on the family’s home. Ms. Goebel testified that the family was behind on mortgage payments and thusly Option One should be removed from the bankruptcy case.

The only problem with her testimony was that the family had made all their payments. After several hearings, Option One’s lawyers admitted that their only contact on the case was actually with LPS and not Option One at all.

Judge Magner, who presided over the case, certainly had an opinion:

Default affidavits are a lender’s representation as to the status of a loan. They are routinely accepted in both state and federal courts in lieu of live testimony. They are an accommodation to the lending community based on a belief by the courts that the facts they present are virtually unassailable. The submission of evidence by affidavit allows lenders to save countless hours and expense establishing a borrower’s default without the need for testimony from a lending representative. While they can be refuted by a borrower, too often, a debtor’s offer of alternative and conflicting facts is dismissed by those who believe that a lender’s word is more credible than that of a debtor. The deference afforded the lending community has resulted in an abuse of trust. [Emphasis added.]

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us. We have also started handling bankruptcy cases.

You can join our Facebook Fan Page – Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

You can also sign up for our free email newsletter sent out every Thursday morning – we cover topics such as the one in this post. We would love to include you!

by
Updated:

Comments are closed.

Contact Information