Lender Processing Services Inc., provider of real estate technology, services, and mortgage performance data, today filed a motion to dismiss a consumer fraud lawsuit against the company filed by the state of Nevada that alleges the company falsified foreclosure documents.
The state’s attorney general, Catherine Cortez Masto, filed the suit on Dec. 15, 2011, in a state district court in Clark County. The suit names LPS, its predecessor Fidelity National Information Services Inc., and LPS subsidiaries including DOCX LLC and LPS Default Solutions Inc.
The complaint alleges "widespread document execution fraud, deceptive statements made by LPS about efforts to correct document fraud, improper control over foreclosure attorneys and the foreclosure process, misrepresentations about LPS’s fees and services, and evidence of an overall press for speed and volume that prevented the necessary and proper focus on accuracy and integrity in the foreclosure process," the state attorney general’s office said in a statement about the suit.
In a statement, LPS said that "the attorney general’s complaint fails to allege that any document executed by subsidiaries of LPS was incorrect, contained errors, or caused any borrower financial harm."
"Although we have to defend ourselves against allegations that we believe are untrue, we remain committed to working with the attorney general’s office to resolve these matters," stated Hugh Harris, LPS president and CEO.
In its legal response filed today, LPS asked the court to dismiss the suit, asserting that the law the company is accused of violating — Chapter 598, Nevada’s Deceptive Trade Practices Act — "does not apply to allegedly deceptive mortgage foreclosures or allegedly deceptive foreclosure related documents, but rather is limited to sales of goods and services."
Furthermore, LPS said, neither "robo-signing" or "surrogate signing" are illegal in the state of Nevada and do not constitute "forgery."
"Plaintiff’s claims are a collection of suppositions, legal conclusions, and inflammatory labels that entirely fail to link the alleged conduct with any transaction in this state that could give rise to a claim under Chapter 598," the motion said.
The attorney general’s office stated that LPS required employees to execute or notarize as many as 4,000 foreclosure-related documents a day.
"The robo-signing crisis in Nevada has been fueled by two main problems: chaos and speed," Masto said in a statement. "We will protect the integrity of the foreclosure process. This lawsuit is the next, logical step in holding the key players in the foreclosure fraud crisis accountable."
According to the Nevada attorney general’s office, LPS is the nation’s largest provider of default mortgage services and processes more than half of all foreclosures annually.
According to a report from RealtyTrac, Nevada had the highest state foreclosure rate for the fifth straight year in 2011, with more than 6 percent of the state’s housing units, or 1 in 16, receiving at least one foreclosure filing last year.
That was despite a 35 percent decrease in foreclosure activity from the third to the fourth quarter, RealtyTrac said, partially due to a new state law that took effect in October designed to crack down on documentation irregularities by foreclosing lenders.
| Contact Inman News: | |||
 Email |
 Letter to the Editor |
||
More from Inman News
