Nevada AG Begins To Pull Back Curtain & Prosecute Shenanigans At Foreclosure Document Processing Sweatshop

The New York Times reports:

• Last month, [Nevada Attorney General Catherine Cortez] Masto sued Lender Processing Services, the huge default and foreclosure processor that works behind the scenes for most large banks. With this case, she demonstrated how enlightening an in-depth study can be.



• The complaint, which came after a 14-month inquiry, contends that L.P.S. deceived consumers by committing widespread document execution fraud, misrepresenting its fees and making deceptive statements about its efforts to correct paperwork. Investigators interviewed former L.P.S. employees and customers and examined foreclosures the company had worked on.

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• The details recounted in the Nevada lawsuit describe how that system hustled borrowers through the foreclosure process. A boiler-room operation comes to mind, or that great Lucille Ball skit in which she tries in vain to keep up with the assembly line at a chocolate factory.



• For example, a former L.P.S. employee who worked in “attorney management,” overseeing firms that performed legal work for foreclosures, told Nevada investigators that L.P.S. required him to resolve issues raised by the firms at a rate of 30 foreclosure files every hour. That’s two minutes apiece. The employee soon left L.P.S.



• Former workers at another division described their work as “surrogate signers.” They said their job was to forge signatures on documents. These people were hired through temporary agencies; one said she was paid $11 an hour and told that her job was “to sign somebody else’s signature on documents,” the lawsuit said. She told investigators that she signed roughly 2,000 documents a day for months.



• Another former worker said that when a banking executive came by for a tour, the signers were told “to lie” and tell the executive they were signing their own names, the lawsuit says.



• Notarization worked much the same way, the complaint said. One former worker said she realized that she might have notarized documents she had also signed as a surrogate. As a result, the lawsuit said, borrowers had to deal with documents containing “false assertions about which entity was authorized to foreclose, and false assertions about whether the consumer was delinquent on a loan payment.”

For the story, see From East and West, Foreclosure Horror Stories.

For the lawsuit, see State of Nevada v. Lender Processing Services, Inc., et al.