Cease and Desist Consent Order Issued Against DocX and LPS Default Solutions
By Daniel Edstrom
DTC Systems, Inc.
These consent orders are coming out of the woodwork. Here is an excerpt:
WHEREAS, in providing document execution services to Examined Servicers, including
services that facilitated completing foreclosures, LPS and its employees allegedly:(a) Executed numerous affidavits and similar sworn statements (collectively,
“Affidavits”) making various assertions, such as the ownership of the mortgage note and
mortgage (or deed of trust), the amount of principal and interest due, and the fees and expenses
chargeable to the borrower, in which the affiant represented that the assertions in the Affidavit
were made based on personal knowledge or based on a review by the affiant of the relevant
books and records, when, in many cases, they were not based on such knowledge or review.
LPS executed these Affidavits on behalf of Examined Servicers knowing they would be filed in
state courts and in connection with bankruptcy proceedings in federal courts;(b) Executed assignments of mortgages containing inaccurate information pertaining
to matters including the identity and location of the assignee and beneficiary and the effective
date of the assignment. LPS recorded or caused to be recorded these assignments of mortgages
in local land record offices, or executed them on behalf of Examined Servicers knowing they
would be filed in state courts or in connection with bankruptcy proceedings in federal courts;(c) Executed Affidavits, assignments of mortgages, and other mortgage-related
documents (collectively, “Mortgage Documents”) on behalf of Examined Servicers without
authority to execute the Mortgage Documents, specifically without having been duly appointed
as an agent or officer of the Examined Servicers to execute documents on behalf of the
Examined Servicers;(d) Recorded or caused to be recorded in local land records offices numerous
Mortgage Documents that were not properly notarized, including those not signed or affirmed in
the presence of a notary, or knew that such Mortgage Documents would be filed in state and
federal courts;(e) Failed to respond in a sufficient and timely manner to the increased level of
foreclosures by increasing financial, staffing, and managerial resources to ensure that LPS
adequately handled the document execution services that LPS provided to Examined Servicers;
and(f) Failed to have adequate internal controls, policies and procedures, compliance,
risk management, internal audit, and oversight of the document execution services that LPS
provided to Examined Servicers;WHEREAS, the practices set forth above allegedly constitute unsafe and unsound
banking practices;
