We have been pouring over the docs submitted in American Home Mortgage Servicing, Inc.’s lawsuit against Lender Processing Services. We have finally obtained a copy of the entire complaint, including all exhibits, which can be read here and which we have already posted about this morning.
We knew the devil would be in the details, and in this case, the devil in in the exhibits. Specifically, Exhibit K. While this may be a little technical for some of our readers, we think it is important to point out exactly what LPS admitted it was doing, why AHMSI wants over 9 million dollars from LPS, and what it means to homeowners.
Exhibit K is a letter from Sheryl L. Newman, Sr. Vice President and Chief Litigation Counsel for Lender Processing Services, to Eric J Spett, VP & Associate General Counsel for AHMSI. Ms. Newman (and yes, every time I say her name I think of Seinfeld), was responding to a demand letter from Mr. Spett seeking indemnification for improper assignments from various entities to AHMSI, thereby allowing AHMSI to proceed with foreclosures in every state in the Union.
The main basis of the complaint, and the basis of various demand letters from AHMSI to LPS, is that LPS was using “surrogate signers” to sign on behalf of officers of AHMSI, (these “officers” were actually employees of LPS but did in fact have limited signing authority granted by the board of directors of AHMSI). Essentially, LPS forged the names of these special officers, had those signatures notarized, and recorded the the transfer documents in various county recorder’s offices to allow AHMSI to proceed with foreclosures. Surrogate-signers, robo-signers, it all means the same thing, and readers of our blog know why this is so important. Namely, AHMSI was relying on documents in its foreclosure practice that were fraudulent. This fraud, then, has the effect of potentially making the foreclosures themselves fraudulent, and exposed AHMSI to various liabilities ranging from the foreclosure being void all the way up to civil damages. This all depends on the state in which the foreclosure took place.
Ms. Newman, as you can read for yourself in the full complaint linked to above, or in the letter attached to the complaint as Exhibit K below, calls this fraudulent activity “notarization error”.
Notarization error = fraud. Simple as that.
If you had your home foreclosed on by AHMSI, it is imperative that you contact an attorney to review the case. It is possible everything was done above board and the foreclosure was proper. However, based on LPS’s own admissions, it is also possible that the foreclosure was improper, if not illegal, and you may be entitled to various forms of redress depending on the state you live in.