'Robo-Signing' Fallout Continues To Hit Legal, Financial Industries
The ripple effect of the foreclosure crisis continues to impact the legal and financial industries, with a number of companies and once-major law firms now facing severe sanctions, or, in some cases, being forced to shut down their doors completely.
Earlier this year, Jacksonville, Florida-based Lender Processing Services, Inc. (LPS) agreed to pay out $155 million in two separate settlements to resolve accusations that it and its subsidiaries, LPS Default Solutions and DocX, engaged in “widespread ‘robo-signing’ of foreclosure documents.”
The first settlement was with 46 state Attorney’s General and the second with the U.S. Department of Justice. Both agreements require LPS to overhaul its practices to prevent the types of improper notarization and document-signing practices at the heart of the “robo-signing” crisis.
The Florida-based Watson Firm, which was accused of improperly processing, signing and notarizing hundreds of thousands of foreclosure affidavits, has agreed to close its doors. In a separate action, Maryland attorney Thomas P. Dore and his firmare facing sanctions after being accused of “robo-signing” and other procedural misconduct.
In the wake of the $25 billion National Mortgage Settlement, with five of the nation’s largest mortgage servicers, government regulators and consumer advocates are scrutinizing law firms, third party vendors, and the Notaries who work for them.