New York will see a $1.9 million share of a $121 million multistate settlement with mortgage loan processors whose illegal practices helped push millions of U.S. homeowners into foreclosure, state Attorney General Eric Schneiderman said Thursday.
In so-called robo-signing operations, Lender Processing Services Inc. and its subsidiaries LPS Default Solutions and DocX allegedly had workers churn out high volumes of legally questionable bank foreclosures.
Schneiderman said the settlement, which awaits finalization as a consent decree, imposes terms on the processing firm and its subsidiaries that would:
- Ensure proper authority to sign documents on behalf of a servicer;
- Require accurate identification of the authority that the signer has to execute the document and where that signer is employed;
- Prohibit notarizing documents outside the presence of a notary and ensure that notarizations will comply with applicable laws;
- Ban improper interference in an attorney-client relationship between attorneys and servicers;
- Prohibit offering incentives to lawyers for speed or volume to the detriment of accuracy in processing foreclosures;
- Allow for foreclosure and bankruptcy lawyers to communicate directly with loan servicers;
- Beef up oversight and review of processes over third parties that Lender Processing Services manages;
- Bar imposition of unreasonable markups or other fees on third-party providers’ default or foreclosure-related services; and
- Require modification within limits of the law of loan documents that need remediation.
The settlement also calls for Lender Processing Services to maintain a toll-free number for consumers.
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