Remember that whole robo-signing debacle where the mortgage lending industry got caught falsifying records in thousands of foreclosure cases? Company employees admitted signing affidavits attesting to the veracity of documents required to push foreclosures through the courts, while knowing full well they had never even checked them out, let alone read through them.
Now, one company caught up in that scandal—Lender Processing Services Inc.—has cut a sweetheart of a deal with federal prosecutors that requires them to pay $35 million in fines, and to promise never to do it again. That fine comes on top of a $120.6 million settlement agreement with attorneys general in 46 states and Washington, D.C. to resolve similar allegations. So far, only one person, Lorraine Brown, former president of defunct LPS subsidiary DocX LLC, has pleaded guilty to criminal charges relating to the six-year scandal. At most, she will serve five years behind bars.
The latest settlement is bittersweet. While LPS arguably dodged a bullet with the settlement, there is a silver lining for homeowners in that the deal also establishes clearer ground rules.
It also potentially offers the troubled company a fresh start, giving those dealing with LPS more confidence. At least that's the goal. In a press release, LPS president and CEO Hugh Harris called the settlement "a positive step" for the company, which has now dealt with "legacy issues related to past business practices."
Still, although the settlement pulls back the curtain just a bit on what took place behind the scenes in the mortgage industry, LPS light sentence cements the notion that not only is there a Wall Street Rule, but that Wall Street indeed rules.
Real estate attorney Roy Oppenheim left Wall Street for Main Street, founding Oppenheim Law with his wife in 1989 in Fort Lauderdale, Fla. He is vice president of Weston Title and creator of the South Florida Law Blog, named the best business and technology blog by the South Florida Sun-Sentinel. Follow Roy on Twitter at @OpLaw or like Oppenheim Law on Facebook.