Ohio and 45 other states will share in a $120 million settlement with a Jacksonville, Fla.-based company accused of improper conduct related to mortgage loan default servicing, according to Ohio Attorney General Mike DeWine’s office.
The multi-state settlement announced Thursday with Lender Processing Services Inc. and its subsidiaries, LPS Default Solutions and DocX, resolves allegations that the company “robo-signed” documents and engaged in other improper conduct, officials said.
“The practice of ‘robo-signing’ caused significant damage to many Ohioans during the housing crisis when buyers were sold mortgages that they could not sustain payments on,” DeWine said in a statement. “This settlement will set up proper safeguards to reduce misuse of ‘robo-signing,’ so that Ohioans are not set up for failure when they sign a mortgage.”
Officials said the settlement will require proper execution of documents, prohibit signature by unauthorized persons or those without first-hand knowledge of facts attested to in the documents, require enhanced oversight of the default services provided, and require a review of all third-party fees to ensure that the fees have been earned and are reasonable and accurate.
Once the judgment is entered by the courts, LPS will undertake a review of documents executed from Jan. 1, 2008 to Dec. 31, 2010 to determine what documents, if any, need to be re-executed or corrected.
The Ohio Attorney General’s Office will receive $2.5 million in relief from the settlement, which will be placed in a fund for programs to provide assistance to families and individuals who are at risk for foreclosure or have already lost their home, officials said. Ohio received the 14th largest share of the settlement.