Alleged illegal fee-splitting scheme
DeKalb County Circuit Judge Randall Cole recently denied a motion by Lender Processing Services (LPS) for their sanctions against Alabama attorney Nick Wooten who is currently suing LPS in several cases on behalf of homeowners, alleging an illegal fee-splitting scheme between default services attorneys using LPS’ platform.
Further, the judge declined to seal a transcript that included deposition statements by LPS executive Bill Newland and the default services agreement, both of which fuel Wooten’s lawsuits.
Confidentiality of documents no longer in question
LPS argued that the documents Wooten is using to sue them are confidential and obtained in confidence in an unrelated bankruptcy case Wooten handled last year, but the Judge ruled that the materials were already publicly disseminated prior to LPS sealing them in December of 2010.
Just like in the FDIC suit
In a statement similar to their response to the FDIC filing suit against them for allegedly over-inflating appraisals causing WaMu to take on bad loans, an LPS spokesperson said, “LPS will continue to vigorously defend itself against all allegations.”
This judge’s simple ruling is said to be a big victory for the “little guy” and some anticipate this move to foreshadow other potential cracks in Goliath’s armor. A hefty amount of documents will not be sealed because of Judge Cole’s ruling and now Wooten can get back to focusing on the alleged illegal fee scheme.
As of publication, DeKalb County has not yet released the full transcript of the ruling and opinion rendered.
