Last Week Bankruptcy Judge Elizabeth Wagner, in New Orleans, issued a 26 page decision regarding conduct of Lender Processing Service (LPS) a company out of Jacksonville, Florida in the attempt to advance a foreclosure in the case of Ron and Larhonda Wilson. LPS is often hired by a mortgage servicing companies (BAC Home Loans Servicing, LP, Wells Fargo, CitiMortgage, Aurora, etc) to direct in the process of forcelosing upon someones home and in the process of filing a Motion for Relief from Stay in Bankruptcy Court. By its own admission LPS through providing documents or through servicers using its software platform (MSP) is involved in over 50% of the defaulted mortgages arround the nation. LPS is usually a “silent player” in the foreclosure process with courts and debtors never being made aware of the dominion and control LPS exercises.
Judge Wagner paid particular attention to the situation where debtors had proof of being current on their mortgage were still facing allegations from their Mortgage Servicer that they were delinquent. In the end, Judge Wagner paid particular attention to the testimony of Dory Gobel, a LPS employee who was signing documents in a variety of title for lending institutions and mortgage servicers all around the country. Attached is the link to a story written by Christopher Magg and published at credit.com, that outlines the Lack of institutional control that existed at LPS and at the mortgage servicer responsible for the Wilson’s loan.
In addition to Judge Wagner’s opinion LPS entered into a Consent Order with the Federal Reserve Board (click here for the Press Release) in which it agreed to take steps to correct deficiencies in its role in the foreclosure process. While the Consent Order is as weak as branch water, it is at least a governmental step to acknowledge that the Mortgage Industry had had disregard for the rule of law and spirit of justice that are fundamental to American Courts.
At present it appears that the process of foreclose in Kentucky and all around the nation will receive scrutiny from federal regulators. Despite this new interest is is up to each of us a citizens and homeowners to remain vigilant and stand tall when facing foreclosure.