Fidelity National’s ServiceLink Fined $65 Million for LPS (BlackKnight) Robosigning

The fine, assessed by the Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, satisfies a provision of a previous consent order against Lender Processing Services. The fine will be paid to the U.S. Treasury.

The problem here is obvious: How can the FED, FDIC, and OCC fine the perpetrators of fraud in the courts without also revealing their administrative finding that the transactions were nonexistent and that the foreclosures were without basis?

The second problem is the obvious unasked and unanswered question: why was it necessary to resort to fraud and forgery if the base transactions (the originations) were true and valid?

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LPS had faced accusations for a number of years that the company and its subsidiaries fraudulently signed legal documents used in foreclosure proceedings. Fidelity National acquired LPS in 2014, and the company’s business was split between ServiceLink and Black Knight Financial Services, which is shielded from a fine through an agreement with ServiceLink.

Before being bought by Fidelity National, LPS reached a $127 million settlement with state regulators and paid $35 million to settle a Justice Department inquiry.

8 Responses

  1. Question is — LPS was already fined for 2 billion, and they were required to set records straight, why again? Obviously, the first settlement did not work. .

  2. Marina is correct. Nothing for the true victims – the homeowners. The Settlements covered up and blocked investigation. We have been lied to. Everyone should try to educate the new administration on what really happened, and continues to date.

  3. The problem here is obvious: Again …What about the homeowners? Why does the Treasury, Cfpb, and any other government
    t agency get the fines, settlements, etc. and nothing for the victims of title and foreclosure fraud.

  4. The combination of high foreclosure rates and high levels of mortgage backed securitization activity has many people attempting to understand the complex securitization process and identify the parties to the MBS transactions and their assigned responsibilities

    Distinct Party Roles Parties involved in a MBS transaction include the borrower, the originator, the servicer and the trustee, each with their own distinct roles, responsibilities and limitations.

    Parties to a Mortgage Backed Securities Transaction

    Borrower The person or entity responsible for the mortgage note and making principal and interest payments in accordance with the underlying mortgage documents. Investment Bank/Sponsor Responsible for structuring the MBS transaction and selling the securities to investors. Investor The buyer and owner of an MBS certificate or certificates. Originator The financial institution or mortgage lender who originally initiates the mortgage agreement with the borrower. Servicer Appointed by the sponsor and is a contractual party to the trust, to administer the mortgages loans and to collect monthly payments (e.g. principal/interest, tax, insurance). After collection, the servicer sends the funds to the trustee who then makes payment to the investors. If a borrower (mortgagee) does not make payments to the servicer as required by the mortgage documents, the servicer may have to foreclose on the property and provide property maintenance to maximize the return on the investment made by the “beneficial owners of the Trust” — the investors. Some MBS transactions have more than one servicer. The servicer does not own the mortgages/collateral. The trustee does not designate the loan servicers, nor are the loan servicers agents of the trustee. U.S. Bank is not responsible for and does not guarantee the products, services, performance or obligations of its affiliates. NOT A DEPOSIT NOT FDIC-INSURED MAY LOSE VALUE NOT GUARANTEED BY THE BANK NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY Investment and Insurance products are: ROT511 Trust Generally a special purpose entity, such as a Real Estate Mortgage Investment Conduit (REMIC), that is formed solely to hold the mortgage collateral and to issue the securities which are then sold to investors. The trust owns the pooled mortgages. The trust conducts no other business. Certificates issued by the trust represent a financial interest in a pool of mortgages owned by the trust and is the primary source of funds for payment of interest and principal due to the investors on certificates they own. Trustee An independent party, responsible for administering the trust for the benefit of investors. While the trustee is listed as the owner of record, the trustee does not have an economic or beneficial interest in the loans. The trustee is the owner of the mortgage solely for the benefit of the investors in the mortgage backed securities, who are the true beneficial owners of the mortgages. The Trustee holds a security interest in the mortgaged property by having the mortgage loans assigned in the name of the trustee for the benefit of the trust (e.g. U.S. Bank as Trustee for the MBS Trust) or in the name of MERS, a Mortgage Electronic Recording System used by many of the largest financial institutions. The duties of the trustee are administrative in nature, are clearly spelled out in the MBS transaction documents, and generally are non-discretionary in nature. For more information about U.S. Bank and our role as trustee in MBS transactions, please call (800) 236-3488 between the hours of 8 a.m. and 5 p.m.

    U.S. Bank as Trustee and all other bank trustee: As Trustee, U.S. Bank Global Corporate Trust Services performs the following responsibilities: • Holds an interest in the mortgage loans for the benefit of investors • Maintains investors/securities holder records • Collects payments from the Servicer • Distributes payments to the investors/ securities holder • Does not initiate, nor has any discretion or authority in the foreclosure process • Does not have responsibility for overseeing mortgage servicers • Does not mediate between the servicer(s) and investors in securitization deals • Does not manage or maintain properties in foreclosure • Is not responsible for the approval of any loan modifications . All trustees for MBS transactions, including U.S. Bank, have no advance knowledge of when a mortgage loan has defaulted. Trustees on MBS transactions, while named on the mortgage and on legal foreclosure documents, are not involved in the foreclosure process.

    Who initiates and Manages a Foreclosure? U.S. Bank, as trustee for thousands of securitization transactions involving many millions of mortgages, is often mentioned in media reports about foreclosures. While trustees are listed on mortgages, and therefore in legal documents as well, as the owner of record, its interest is solely for the benefit of investors. The trustee does not have an economic or beneficial interest in the loans and has no authority to manage or otherwise take action on the loans which is reserved for the servicer. As noted, the trustee does not play a role in initiating or managing a foreclosure process and consequently has little, if any, information relating to mortgage loan activities including a foreclosure. Depending on the particular trust and pool, the trustee may have very limited information on either the borrower or the property. The servicer, who is selected by the Sponsor of the trust, may have to foreclose on a property if a borrower (mortgagee) does not make payments as required by the mortgage documents. Any action taken by the servicer must maximize the return on the investment made by the “beneficial owners of the trust” — the investors.

    Additional Sources of Information: — American Bankers Association White Paper, The Trustee’s Role in Asset-Backed Securities, dated November 9, 2010 — The Trust Indenture Act of 1939


  5. If the facts stated by Mr. Garfield ARE true, such that a fine is appropriate, shouldn’t it follow that ALL the foreclosures with those documents should be undone? Homeowners get their houses back? Or at least the money the homeowners paid on the loans in principal and interest? Without having to fight the banks, lenders and servicers one by one, loan by loan, like it has been being up to now – where if the homeowner is too poor to fight or can’t find a lawyer who will help him or her, too bad. Too many of us CAN’T find a lawyer who will work hard or do anything, and it should NOT then be “too bad, homeowner is out of luck and gets stripped of his equity, his credit, his reputation, and as much of his money and savings as the banks et al. can suck out of him”.

  6. I have been bitching about Servicelink for a few years now,they pretty much do the data thing and don’t care how they put the phony docs together.
    Now they do posting for a slew of phony trustees who run the same racket,send the same BS,saying they May be a debt collector today,tmro we are a law firm.

    The same jerk off regulators who sat back and allowed these fools to rob people of their property and their dignity and make them feel as though they were to blame,now want to profit from our loss.

    I want a piece of that fine,I deserve it,as well as many others,that should be all the motivation one needs to start the revolution to free this country from the grip of greed.Lets do it.

  7. Thank you David,

    More on TILA rescission-:

    Under TILA, the extended right to rescind is created when the borrower is not properly notified of the three-day right to cancel or the TILA disclosures are not accurate within certain statutorily defined tolerances. Additional rights to rescind are also afforded under HOEPA,

    The Federal Truth in Lending Act: What You Don’t Know Can … The Federal Truth in Lending Act: What You Don’t Know Can Hurt You. Pamela D. Simmons. Introduction. Ten years ago, I represented the borrower in a case …

    Karen Saint 646 504 2581 Email:


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