The two title officers indicted in the Las Vegas foreclosure document robo-signing scam this week have been identified as employees of Lender Processing Services Inc., which banks use for loan servicing and foreclosure work.
The Jacksonville, Fla., company on Thursday acknowledged its employees had been charged, but said the company has been told it’s not a target of the Nevada Attorney General’s robo-signing investigation and that the probe didn't involve any wrongful foreclosures.
California residents Gary Trafford and Gerri Sheppard were indicted by a Clark County grand jury on 606 counts of felony and misdemeanor charges alleging they were responsible for the filing of tens of thousands of fraudulent documents with the Clark County Recorder’s Office between 2005 and 2008.
The state alleges the defendants directed employees to forge the defendants’ names on foreclosure documents, then notarize the signatures they forged, in the process fraudulently attesting that the defendants actually signed the documents.
The foreclosure documents, called Notices of Default, were then filed with the county recorder to start the foreclosure process.
The Attorney General's office announced Thursday that a local notary public had pleaded guilty to a misdemeanor related to the robo-signing scam.
Tracy Lawrence, 43, pleaded guilty Monday to one count of notarizing the signature of an individual not in her presence. Lawrence, who is scheduled to be sentenced Nov. 28, faces up to one year in jail and a fine of up to $2,000.
The charges against her say that in October 2008, she notarized Trafford’s signature on a notice of default when Trafford was not in her presence and that this was done “in a secretive manner in order that the false documents be given full legal effect and that this criminal activity not be discovered.”
Asked whether the scam was a money-making scheme in which the defendants took shortcuts to save money, Attorney General’s spokeswoman Jennifer Lopez said she couldn’t comment.
Asked if the scheme resulted in wrongful foreclosures, Lopez said, “If the (foreclosure) Notice of Default is fraudulent or filed in violation of the law, it calls into question the legality of any subsequent foreclosure, as well as any subsequent sale or transfer of title following the foreclosure.”
Lender Processing Services (LPL), however, said in a statement there were no wrongful foreclosures.
“Based on the company's reviews, LPS acknowledges the signing procedures on some of these documents were flawed; however, the company also believes these documents were properly authorized and their recording did not result in a wrongful foreclosure,” LPS said.
While there have been plenty of criminal prosecutions in Nevada and other states over alleged mortgage fraud during the housing boom, the Los Angeles Times reported Thursday that the charges against the LPS officers appear to the first criminal charges in several robo-signing investigations around the country.
Trafford, 49, and Sheppard, 62, now live in Orange County, Calif., the Times reported.
The defendants have not yet commented on the allegations against them.
For Lender Processing Services, which said it’s fully cooperating with the Nevada investigation, the probe is just the latest involving the company in recent years.
In a Monday regulatory filing, LPS said it’s been cooperating with multiple state and federal inquiries into its business practices.
On April 13, the company signed a consent order with federal bank regulators in which it agreed to study issues identified by the regulators and to enhance its compliance efforts.
The regulatory agencies involved in the order were the Federal Reserve System, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
They had been looking into LPS’s document execution services and other default operations provided to mortgage companies regulated by the banking agencies.