Magazine article American Banker

LPS Files Motion to Dismiss Nevada AG Fraud Charges

Magazine article American Banker

LPS Files Motion to Dismiss Nevada AG Fraud Charges

Article excerpt

Byline: Evan Nemeroff

Lender Processing Services has filed a motion to dismiss charges made by Nevada Attorney General Catherine Cortez Masto against the company and two subsidiaries for fraudulent business practices.

The lawsuit, filed in December in Clark County's Eighth Judicial District Court, accuses Jacksonville, Fla.-based LPS and its subsidiaries Default Solutions and DocX of violating the Nevada Deceptive Trade Practices Act.

The AG's complaint said LPS forged signatures and fraudulently notarized up to 4,000 documents a day in an effort to quickly process foreclosures on behalf of mortgage servicers. The AG claims LPS also demanded kickbacks from foreclosure law firms and called those payments "attorney's fees" on invoices given to consumers and submitted in courts.

Masto alleges the company improperly controlled the work of foreclosure attorneys, forcing them to churn out documents quickly in an assembly-line sweatshop environment.

However, LPS said in its motion to dismiss that the AG's complaint contains significant legal defects that require the court to dismiss the complaint with prejudice. Additionally, LPS said that the complaint fails to allege that any document executed by subsidiaries of LPS was incorrect, contained errors, or caused any borrower financial harm.

"Plaintiff's claims are a collection of suppositions, legal conclusions and inflammatory labels that entirely fail to link the alleged conduct with any transaction in this state that could give rise to a claim under Chapter 598. …

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