« Many Thanks to Troy McKenzie | Main | The End of Gift Plans? »

Bankruptcy Robosigning Business Challenged by Debtors, Trustee

posted by Alan White

A new amended class action complaint filed on behalf of Chapter 13 debtors, with their Trustee as additional plaintiff, describes in exhaustive detail the business of Lender Processing Services and its network of creditor attorneys and mortgage servicers.  The gist is that LPS sells the dominant software product to mortgage servicers, and the software is designed to refer all foreclosure and bankruptcy cases to LPS-affiliated firms, which then share legal fees earned by litigating stay motions and claims in bankruptcy with LPS companies.  In the process, LPS firms and their nonattorney employees allegedlly produce robosigned missing mortgage assignments and bankruptcy court filings.

This colorful pleading describes LPS as Mephistopheles and the participating law firms as Faust.  Some of the practices are familiar, thanks to Judge Sigmund's decision in the Taylor case, discussed here previously.  LPS and its affiliates, of course, vigorously dispute all allegations and claim that their business is perfectly legal, and does not constitute unauthorized practice of law, although their SEC filings are considerably more ambivalent on the latter point.

More details on this and related litigation are available in this detailed report.

Comments

The comments to this entry are closed.

Contributors

Current Guests

Follow Us On Twitter

Like Us on Facebook

  • Like Us on Facebook

    By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. (If you change your mind, you can undo it later.) Note that this is different than "Liking" our Facebook page, although a "Like" in either place will get you Credit Slips post on your Facebook news feed.

News Feed

Categories

Bankr-L

  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

OTHER STUFF