FDIC Files Suit Against Fidelity, LPS INC. and Others – Who’s Next?

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FDIC Files Suit Against Fidelity, LPS INC. and Others – Who’s Next?

Posted by RE-Insider on 5/16/11 • Categorized as Buying a house,Buying property,Feature Stories,RE Insider,Real Estate

On May 9, the Federal Deposit Insurance Corporation (FDIC) filed suit against Fidelity and others seeking over $154 million in damages. The suit, filed in the US District Court, alleges that Fidelity and LPS acted with a “carelessness that rises to the level of gross negligence…” in its dealings with the now-defunct Washington Mutual Bank.

Named in the suit are LSI Appraisal LLC, Fidelity National Information Services Inc., Lender Processing Services Inc., Lender Processing Services LLC and LPS Property Tax Solutions Inc. f/k/a Fidelity National Tax Service, Inc., LSI Title Company, and LSI Title Agency, Inc.. The FDIC, acting as the receiver of Washington Mutual, alleges that LSI used employees who “lacked skill,” resulting in appraisals that “substantially inflated appraised values.” The FDIC further alleges that Fidelity “effectively controlled and directed LSI’s wrongful acts and omissions.”

Read the entire lawsuit and complete allegations here.

Our industry, the economy and the American people have all been hurt by shortcuts and excesses. Today’s FDIC suit alleges wrongdoing by gross negligence. Follow closely the developments in this case and learn the facts through RE-Insider.com.

Please share your thoughts with us …

RE-Insider

Thanks so much for this email. We wanted to share.

Dear RE-Insider,

Let’s be sure we are choosing our words carefully when referring to Fidelity, specifically in your first paragraph.

There are several Fidelity names you could be referring to:

Fidelity National Information Services Inc./LPS (not an FNF Co.)
Fidelity Investments (Not an FNF co.)
Fidelity Home Warranty
Fidelity Insurance
Fidelity Bank (Not an FNF Co.)
Fidelity National Title

Just to name a few…

It would be challenging to have a client of Fidelity National Title give a quick overview to your article and associate us with the law suit. I’m sure you can understand my concern as a fellow business professional.

Regards
RE-Insider

More in the mail bag:

In my opinion this is a frivolous law suit. Title has nothing to do with appraisals. What are these people thinking? Are they nuts!
RE-Insider

From our mail bag:

Yes, I agree they should finally file some action against these predatory lenders. But will they file charges against the big Banks executives who looted the banks after the bailout?
That is necessary too.
RE-Insider

From our mail bag:

How much business was controlled by Fidelity as a result of their relationship with WAMU… How many WAMU loans did Fidelity close due to pressure from WAMU and Fidelity Corporate. Us escrow officers could tell stories!
RE-Insider

From an angry escrow officer:

Dear RE-Insider,

Don’t you find these numbers of what banking penalties are laughable? Pathetic? An absolute insult to our intelligence? $154 million from Fidelity / LPS / LSI ? Isn’t it all a joke? We have trillions in bad loans. Let’s just consider that B of A gave a 100 Million dollar golden parachute to its last CEO… and his “parting gift” was about the size that the FDIC is crying about! Ha! HAHAHA!

Why have we yet to see a front page newspaper headline like “Every Mortgage IS SECURITIES FRAUD!!” Oh, that will not sit well… but it is the truth. Loan officers are actually pushing a SECURITY because each loan goes into a bond, is securitized…hello. How are we still glazing over this?

The banking elite and the scum in DC have really steam rolled us all.

Get to the front line! Here what is happening from loan officers, the infantry.

Keep in mind that the idiots in DC went after how loan officers are paid. Basically, cutting off supplies to the troops. Guess what? That means the idiots in the ivory tower are F-ed. We are sick of fighting the mess that their greed created. We make next to nothing and kill ourselves to get a loan through while they approve short sales far below market value, let people live in houses for years, for free, all the while, if they ALLOWED us to get paid as the free market allows and decent guidelines to give loans on, they would not need to deal with all the foreclosures.

This war is lost because the banking elite and DC decided to sacrifice the nation.
RE-Insider

From another reader:

You should make a distinction between Fidelity Investments (www.fidelity.com) and the financial institution which also has Fidelity in its name.
Bob

I’m so glad our government woke up and is tackling the real problems in our industry! Keep the news coming – I can’t find these informative stories in any newspaper! Thanks

BC

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