American Home vs. Lender Processing Services
New York investor Wilbur Ross has a net worth of 1.9 billion according to Forbes and specializes in buying up distressed businesses and restructuring them to be profitable once again. Today, American Home Mortgage Servicing Inc. (AHMSI) has sued Lender Processing Services, Inc. (LPS) for electronically signing over 30,000 residential mortgage documents without review which has resulted in millions upon millions of dollars in legal fees.
This isn’t the first lawsuit LPS has seen for their role in the robo-signing scandal that hit the mortgage and housing industries so hard. LPS has been served with criminal subpoenas in Michigan and is under investigation in California and Illinois, but the most troubling suit for LPS is easily lawsuit brought on by the FDIC against LPS for negligence and breaches of contract for which they are demanding a jury trial to recoup $154.5 million in losses on behalf of Washington Mutual Bank (WaMu) of which they are now the receiver.
As a single lawsuit, $154.5 million isn’t all that much, but together with lawsuits from banks, federal agencies, state agencies and individual homeowners, the icing on the LPS cake is that the Ross-controled company, AHMSI has filed in a Dallas County, Texas for LPS improperly signing and notarizing mortgage assignments on its behalf in all 50 states.
Another robo-signing lawsuit against LPS
Court documents show that LPS allowed their workers to sign American Home officers’ signatures on documents and employed notaries who improperly notarized the documents. This practice has been cited by most lawsuits against LPS and agencies are aware of even which individuals in the organization were sanctioned to sign under one name (with dozens of varying signatures for each LPS official who allegedly “signed” thousands of documents without manual review).
American Home stopped using LPS in November 2009 when it learned LPS was using these “surrogate” signers and are suing after a lengthy period that has failed to resolve the dispute between AHMSI and LPS. The suit says that “despite their contractual obligations and express promises to the contrary, defendants have refused to reimburse or indemnify American Home” and seeks compensatory and punitive damages along with other remedies.
LPS said in a statement that they disagree with the allegations and not only did they offer to cover some of American Home’s costs, LPS says AHMSI has refused to show proof of any “actual losses.”