In a major effort to protect homeowners and solidify the integrity of property records, the Guilford County (North Carolina) Register of Deeds has filed a lawsuit against 26 mortgage lenders and loan servicers to force them to correct thousands of improperly signed and notarized documents filed with his office.
Register of Deeds Jeff L. Thigpen claims that the 26 entities undermined the integrity, reliability and trustworthiness of the county’s property records by falsifying mortgage and property documents. The lawsuit notes that the recent National Mortgage Settlement and other government actions only redress “robo-signing” abuses going forward, but do little to rectify the thousands of improperly executed documents that have been identified, and those that have yet to be discovered.
Nearly 75 percent of the documents filed by one defendant between 2006 and 2010 were “robo-signed,” the suit alleges, adding that the lenders reaped significant cost savings through the improper practices. The Register of Deeds office lacks resources to identify and correct all the defective paperwork, which creates widespread legal uncertainty over property titles and inhibits the county’s ability to collect property taxes.
The 26 defendants include four of the banks involved in the National Mortgage Settlement as well as Lender Processing Services Inc. (LPS), which is being sued by the Nevada Attorney General for its “robo-signing” practices. Another defendant is the now defunct company DOCX, LLC, whose founder and other company officials were recently indicted by the Missouri Attorney General.