A U.S. senator has asked Attorney General Eric Holder to investigate the business practices of a company that provides technology services to lenders and other companies that process foreclosures.
In a letter sent to the Department of Justice on Thursday, Sen. Ron Wyden (D., Ore.) raised concerns over the business practices of Lender Processing Services Inc, a Jacksonville Fla.-based company that offers software and logistical services for mortgage companies. The letter alleges that LPS employed an improper fee structure that resulted in double-billing homeowners or mortgage investors for legal services related to the processing of foreclosures and bankruptcies.
It also says that the firm’s business model may have been responsible for sowing what became known as “robo-signing,” where bank attorneys and paralegals improperly signed off on foreclosures.
The allegations made in the letter “are incorrect,” said Michelle Kersch, a company spokeswoman, in a statement. “In fact, over the last several years, federal and state courts across the country have dismissed 15 civil cases that were based on the same failed allegations.”
The letter identified concerns brought forward by an unnamed industry professional that Sen. Wyden’s staff said it found credible, after reviewing them with other industry analysts and government regulators, according to the letter.
Ms. Kersch said that LPS doesn’t charge or pass any fees along to borrowers, and that technology and service fees are billed only to parties that use LPS’s products. The company also said that it doesn’t provide legal services and that it has no involvement in setting attorneys’ fees.
Some of the allegations raised in Sen. Wyden’s letter were included in a shareholder class action lawsuit filed two years ago by a pension fund for city employees of St. Clair Shores, Mich.