LPS Asks Nevada Court to Throw Out ‘Robo-Signing’ Consumer Fraud Suit

One mortgage services company undergoing multiple criminal and civil litigation over “robo-signing” allegations has come up with a novel defense: it’s legal.

Lender Processing Services Inc. (LPS), a national provider of real estate technology, services and mortgage performance data, recently filed to dismiss a consumer fraud lawsuit against the company filed by the state of Nevada. The suit alleges the company falsified foreclosure documents and utilized robo-signing on foreclosure documents, as well as other deceptive practices.

As a part of their motion to dismiss, LPS claims that neither “robo-signing” nor “surrogate signing” are illegal in the state of Nevada and therefore do not constitute forgery or fraud.

LPS claims that “the attorney general’s complaint fails to allege that any document executed by subsidiaries of LPS was incorrect, contained errors, or caused any borrower financial harm.”

The state’s attorney general, Catherine Cortez Masto, filed the suit on Dec. 15, 2011, in a state district court in Clark County. The suit names LPS, its predecessor Fidelity National Information Services Inc., and LPS subsidiaries including DOCX LLC and LPS Default Solutions Inc.

Mastro’s office has already filed criminal robo-signing fraud charges against two LPS officers and four notaries. Also, homeowners of both Las Vegas and Henderson have filed a class-action lawsuit against LPS.

Whatever the legal outcome, RE-Insider hopes that LPS’s troubles stop others from considering this practice and helps to resurrect homeowner trust in the real estate industry.