LPS Sanctioned for Perjury by US Judge

by San Antonio Attorney

A New Orleans federal bankruptcy judge has declared that sanctions would be imposed upon Lender Processing Services after finding that the company deliberately defrauded the court in its testimony and submitting fabricated affidavits in a foreclosure case. It was alleged that an employee of LPS had intentionally mislead the bankruptcy court and in its defense, LPS claimed no responsibility in the filing of false information the bankruptcy case of Ron and LaRhonda Wilson in New Orleans.

The decision was penned by Judge Elizabeth Magner was a result of a series of investigations and review of legal actions that involved LPS. It was found that the company based in Jacksonville, Florida had created false documents in foreclosure cases and falsely reporting amounts owed by homeowners in its cases. The company handles mortgage servicing activities such as filing foreclosures and overseeing the outcomes of these cases for banks.

The case stems from a petition by the U.S. Trustees office to sanction LPS after its fraud was found in the bankruptcy case of the Wilsons. She said she would hold a hearing on the culpability of LPS and the gravity of the fines and other penalties imposable on the company. She also criticizes the entire mortgage servicing industry for its “shoddy practices and sloppy accounting practices.” There are other cases being reviewed by the U.S. Trustee where LPS may have defrauded the system and its clients.

The decision was alongside to an LPS agreement to settle with federal bank regulators as to allegations of large scale perjury through creation of false affidavits for foreclosure cases, execution of inaccurate documents showing false ownership of mortgages and other fraudulent practices. This decree is but another part of a long list of settlements entered into by LPS with bank regulatory authorities. The provisions of the consent decree contain no admission of wrongdoing and compliance with the requirement of hiring an independent auditor to review its foreclosure processes.

For its part, this case in New Orleans is but one of the legal complications faced by the company all throughout the country. There is also another federal criminal investigation pending alleging large scale forgery of signatures done by LPS on foreclosure documentation. When asked about these cases, the company spokesperson declined to comment or give an official response.

Other topics relating to bankruptcy can be found on the San Antonio Bankruptcy Page

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