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Mortgage Fraud
American Home Mortgage Servicing
Deutsche Bank National Trust Company
Docx, LLC
Lender Processing Services
Action Date: April 13, 2010
Location: Jacksonville, FL
On April 12, 2010, Lender Processing
Services closed the offices of its
subsidiary, Docx, LLC, in Alpharetta,
Georgia. That office was responsible for
pumping out over a million mortgage
assignments in the last two years so
that banks could foreclose on
residential real estate. The law firms
handling the foreclosures were retained
and largely controlled by Lender
Processing Services, according to a
Sanctions Order entered by U.S.
Bankruptcy Judge Diane Weiss Sigmund (In
re Niles C. Taylor, EDPA, Case
07-15385-sr, Doc. 193). Lender
Processing Services, the largest
"default management services company" in
the country, has already made at least
partial admissions that there were
faults in the documents produced by the
Docx office - although courts and
homeowners were never notified.
According to Lender Processing Services,
over 50 major banks use their default
management services. The banks that
especially need the services provided by
Lender Processing Services include
Deutsche Bank, Citibank, Wells Fargo and
U.S. Bank, acting as trustees for
mortgage-backed securitized trusts.
These trusts, in the rush to securitize
mortgages and sell them to investors,
often ignored the critical step of
obtaining mortgage assignments from the
original lenders to the securities
companies to the trusts. Now, years
later, when the companies "servicing"
the trusts need to foreclose, they
retain Lender Processing Services to
draft the missing documents. The
mortgage servicers, including American
Home Mortgage Services, Saxon Mortgage
Services, and American Servicing
Company, never disclose that the trusts
are missing essential documents - they
just rely on Lender Processing Services
to "fix" the problems. Although the
Alpharetta office has been closed,
Lender Processing Services continues to
mass produce "replacement" assignments
from its Jacksonville, Florida, and
Dakota County, Minnesota offices. Law
firms retained by Lender Processing
Services also often use their own
employees, posing as officer of Mortgage
Electronic Registration Systems, to
produce the needed Assignments. Since
the vast majority of homeowners do not
retain counsel in foreclosure
proceedings, this flawed system has
worked very effectively for the last few
years, with courts all over the country
rarely questioning why so many mortgage
companies had officers in Alpharetta,
Georgia, or why Trusts that closed in
2005 and 2006 were just obtaining
Mortgage Assignments in 2009 and 2010.
Most courts never even questioned why
companies long-dissolved, such as Option
One, could still be executing documents
years after the dissolution. While the
closing of the Alpharetta office may be
a sign that these fraudulent activities
will finally be exposed and addressed,
for the time being, it is just a matter
of an unsatisfactory end of one small
facet of an enormous and far-reaching
problem.
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