The Wall Street Journal has posted an article about a recent investigation into a subsidiary company of Lender Processing Services. The company is responsible for providing (that is making up fraudulent documents) banks with the documentation necessary when preceeding with foreclosures. Federal prosecutors began looking into the company, Docx, after the dismissal of several foreclosure cases…
in which judges across the U.S. have found that the materials banks had submitted to support their claims were wrong. Faulty bank paperwork has been an issue in foreclosure proceedings since the housing crisis took hold a few years ago. It is often difficult to pin down who the real owner of a mortgage is, thanks to the complexity of the mortgage market.
A spokeswoman for Lender Processing Services said that the processes under review had been “terminated” and that the company intends to cooperate with the investigation.
During the housing boom many mortgages that were originated by lenders were quickly sold to Wall Street firms and then were bundled into “debt pools” and sold again to investors as securities.
The loans were supposed to change hands but the documents and contracts between borrowers and lenders often weren’t altered to show changes in ownership, judges have ruled.
This has made it hard for banks, which act on behalf of mortgage-securities investors in most foreclosure cases, to prove they own the loans in some instances.
LPS has software that tracks the majority of US mortgages for banks from the origination of the mortgage until the borrower defaults or the debt is settled. When the bank needs to foreclose because of borrower default, LPS helps process the paperwork that is used in court.
Some lawyers representing homeowners have claimed that banks routinely file erroneous paperwork showing they have a right to foreclose when they don’t.
Firms that process the paperwork are either “producing so many documents per day that nobody is reviewing anything, even to make sure they have the names right, or you’ve got some massive software problem,” said O. Max Gardner, a consumer-bankruptcy attorney in Shelby N.C., who has defended clients against foreclosure actions.
The wave of foreclosures and housing crisis appears to have helped LPS. According to the annual securities filing, foreclosure-related revenue was $1.1 billion last year compared with $473 million in 2007.
LPS has acknowledged its paperwork problems and admitted to finding an “error” in how Docx handled the notarization of some documents. They have also processed documents with “Bogus Assignee” as the loan owner. The name was supposed to just be a placeholder, but unfortunately, several times processing continued before the field could be updated.
“Unfortunately” because now there is absolute proof that LPS makes up “bogus” documents. They are so arrogant that they are blatant about these being false documents. This is what you are up against when you are fighting a wrongful foreclosure. The banks and mortgage companies will make up documents, will lie, will cheat . . . all to steal your home. So be prepared to fight back and don’t expect any mercy out of these greedy companies that helped themselves to our tax money so they can stay in business . . . the business of cheating you.
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