Pa. could get $3.4M in wrongful foreclosures settlement
One of the nation's biggest mortgage processing companies agreed to pay $121 million to resolve states' claims that it wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.
The settlement agreements between Lender Processing Services Inc., of Jacksonville, Fla., and 46 states and the District of Columbia were announced Thursday.
Pennsylvania's share of the settlement is $3.4 million if approved by Commonwealth Court.
Lender Processing Services operates a production center, Lenders Service Inc. at 700 Cherrington Parkway in Moon, that employs about 700.
Under the settlement, the company will be required to reform its business practices and to correct foreclosure documents as necessary. The agreement prohibits unauthorized people or those without first-hand knowledge of the facts laid out in documents to sign them.
The settlement follows similar accords totaling $6 million that Lender Processing signed previously with Colorado, Delaware and Missouri. The company says that leaves Nevada's complaint as the only unresolved state case.
The state attorneys general alleged that the company engaged in unlawful practices including “robo-signing,” in which it automatically signed off on foreclosures without properly reviewing documents.
As part of the settlement, a toll-free telephone line will be established where homeowners can call to determine whether they are involved in the settlement. That number should be available within 10 to 15 days, and be published on the Pennsylvania Attorney General's website, said John Abel, senior deputy attorney general. There will be no timeline on how long the line will be available, he said.
Each case will be looked at individually and if mediation is necessary, that could follow, he said. The company will be required to correct documents as necessary.
Lender Processing said it increased its legal reserve by $48 million in the quarter ended Dec. 31. The balance of the reserve was $223 million as of Dec. 31, the company said.
The Associated Press and Trib Total Media staff writer Sam Spatter contributed to this report.