In competing press releases late Thursday Lender Processing Services, Inc. (LPS) and the Office of the Missouri Attorney General announced the settlement of criminal proceedings against an LPS subsidiary.  Attorney General (AG) Chris Koster said LPS will pay the state of Missouri $2 million to settle indictments against DocX related to the robo-signing scandal of 2010.

Both releases reported that the settlement will requirement payment by LPS of $1.5 million to the Missouri state treasury and $500,000 to the Merchandising Revolving Fund of the AG's Office in reimbursement of the costs incurred in investigating DocX.  The LPS press release, however, did not mention that, as part of the settlement, it had agreed to cooperate with the AGs office in a continuing criminal investigation of DocX founder and former president Lorraine Brown.  LPS terminated Brown in November 2009 and discontinued DocX operations six months later.

The criminal charges against brought by Koster alleged forgery and making false declarations related to mortgage documents processed by DocX in the state of Missouri.  The company was accused of falsely signing, notarizing, and filing various mortgage documents in the name of senior bank officers without authorization. A single DocX employee held a position as designated vice president for several large banks and was authorized to sign the documents, but they were allegedly signed by others.

Koster defended the size of the settlement saying that the LPS subsidiary earned approximately $363,000 in total revenue from the execution and filing of documents within the state between 2008 and 2010 so the agreed-upon payment was well in excess of that amount and approximately two and a half times the amount that could be obtained if convictions were obtained. 

Koster also noted that LPS has entered into a separate consent order with three federal regulators agreeing to a review by an independent consultant of document execution services provided by DocX and other LPS subsidiaries.  The review is intended to assess potential financial injury to borrowers and to prepare a remediation plan to provide restitution if harm is found.

"This settlement is an important milestone in our ongoing efforts to resolve legal and regulatory issues related to the operations of DocX, which we closed in 2010," said Hugh Harris, president and chief executive officer of LPS. "LPS remains focused on resolving all remaining legal and regulatory challenges as expeditiously as possible and is committed to ensuring that we continue to operate with integrity and compliance in everything we do."

Koster said, "My office has taken the position that when you sign your name to a legal document, it matters.  The monetary disgorgement and the agreement we have reached in this criminal case with DocX should remind all mortgage-services processers that our system of titling real property will be held to a standard of accuracy and truth expected by homeowners across the country."

"I appreciate LPS taking responsibility for the actions of its subsidiary, and for their agreeing to cooperate in our continuing criminal investigation of this matter."