Sunday, February 16
LAS VEGAS (AP) — Nevada took a settlement Friday and dropped a consumer-fraud lawsuit against a mortgage services firm that state Attorney General Catherine Cortez Masto had accused of orchestrating a massive illegal "robosigning" scheme.
The deal, announced by Masto, called for her office to receive almost $5.6 million from the former Lender Processing Services Inc., plus another $500,000 in attorney fees and costs. It contained no admission of wrongdoing.
"The settlement and mutual release resolves the state's civil action alleging LPS violated the Nevada Deceptive Trade Practices Act, and all other outstanding issues or claims related to the litigation," Masto said in a statement.
Masto spokeswoman Beatriz Aguirre said the deal resolved every element of the case — and took the state off the hook after a judge two weeks ago ordered Masto's office to pay sanctions that could have amounted to hundreds of thousands of dollars in legal fees to the company.
The lead lawyer for the firm, Mitchell Berger, didn't immediately respond Friday to after-hours messages seeking comment. He had been critical of Nevada for being the only state not to accept a nationwide settlement offer from the company.
The attorney general noted in her statement that Nevada became the 50th state to settle with the Jacksonville, Fla.-based company, now known as Black Knight Financial Services, a subsidiary of Fidelity National Financial Inc.
Masto, a Democrat, had vowed to hold companies responsible after Nevada was hit hard by foreclosures once the Great Recession began in December 2007.
She said Friday said the settlement amount the state would receive was fourth behind California, Florida and Texas.
The attorney general said the company also agreed to review mortgage documents signed and filed between January 2008 and December 2010 to determine if any need corrections.
The company set up a toll-free telephone number, 1-866-854-8935, for Nevada homeowners to seek document reviews.
The agreement to end the civil lawsuit signaled the conclusion of a two-pronged effort by Masto to prosecute the company billing itself as the nation's largest loan processor and some of its agents.
A 306-count criminal case against two Southern California-based loan agents affiliated with the company collapsed a year ago, after a notary public who claimed to have witnessed thousands of robosigning improprieties committed suicide and defense attorneys found that Masto's lead prosecutor had faced foreclosure himself.
In the civil case, Berger told Clark County District Court Judge Elizabeth Gonzalez last month that Masto's office never backed up claims that Lender Processing Services paid kickbacks to pursue foreclosures, committed forgery when signing documents or targeted the elderly.
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