Foreclosure Servicer Indicted

Econintersect:  A Boone County, Missouri grand jury has indicted DocX, one of the largest companies in the nation to provide foreclosure services to lenders nationwide.  The company is charged with forgery stemming from foreclosures against home owners in the state.  According to the indictment, DocX is accused of making “mass-produced fraudulent signatures on notarized real estate documents.”  The company could face up to 136 counts of forgery in the preparation of documents used to evict defaulting home owners from their homes.  DocX could face a fine of up to $10,000 for each forgery conviction.  The company’s founder and former president, Lorraine O. Brown, was also indicted on the same charges.  If convicted on all counts, Ms. Brown could face up to 952 years in prison under Missouri law.

According to Gretchen Morgenson in the New York Times:

Employees of DocX, a unit of Lender Processing Services of Jacksonville, Fla., executed and notarized millions of mortgage documents for big banks and loan servicers over the years. Lender Processing closed the company in April 2010, after evidence emerged of apparent forgeries in these documents, a practice now called robo-signing.

The Attorney general of Missouri, Chris Koster, will try the case.  There are indications that the state may be hoping for cooperation from Ms. Brown in the investigation of the company.  Brown has indicated through her attorney that she intends to plead not guilty.

Here is the full press release by the Missouri Attorney General’s office:

Jefferson City, Mo. – Attorney General Chris Koster today announced that a Boone County grand jury has handed down 136-count indictments against DOCX, LLC and its founder and former president, Lorraine Brown, for forgery and making a false declaration related to mortgage documents processed by DOCX.

“The grand jury indictment alleges that mass-produced fraudulent signatures on notarized real estate documents constitutes forgery,” Koster said. “Today’s indictment reflects our firm conviction that when you sign your name to a legal document, it matters,” Koster said.

The forgery and false declaration counts each allege that the person whose name appears on 68 notarized deeds of release on behalf of the lender is not the person who actually signed the paperwork. The documents were then submitted to the Boone County Recorder of Deeds as though they were genuine.

Koster’s office requested the indictment, and the Attorney General’s Office will prosecute the case.

The indictments are the result of months of investigation by the Attorney General’s Office into the robo-signing scandal that injected thousands of questionable mortgage documents into the market. When the practice began to come to light, several major lenders temporarily suspended foreclosures in 2010. DOCX’s role in the robo-signing process came to national attention when 60 Minutes reported that Linda Green, an employee of DOCX, purportedly signed thousands of mortgage-related documents on behalf of several different banks and in multiple handwritings. The 68 documents on which the indictments are based were purportedly signed by Linda Green, but were allegedly signed by someone else.

Forgery is a Class C felony and False Declaration is a Class B misdemeanor. If convicted on the most serious count, Brown could face up to seven years in prison for each count. DOCX could be fined up to $10,000 for each forgery conviction and $2,000 for each false declaration conviction.

The charges against DOCX and Lorraine Brown are merely accusations and, as in all criminal cases, the defendant is innocent until or unless proved guilty in a court of law.

The Attorney General’s investigation into this practice continues.

Sources:

• Company Faces Forgery Charges in Mo. Foreclosures (Gretchen Morgenson, The New york Times, 6 February 2012)

• Major Foreclosure Servicer Charged With Forgery (Realtor Mag, 8 February 2012)

• Attorney General Kostar announces 136-count criminal indictments related to robo-signing in mortgage industry – – Boone County grand jury indicts Georgia corporation and its president for practices highlighted in 60 Minutes report – – (Missouri Attorney General Web Site)