Lender Processing Services Announces Multi-State AG Settlement
Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, today announced that it has entered into settlement agreements with the attorneys general of 46 states and the District of Columbia.
The multi-state settlement, which includes an aggregated payment by LPS of $127 million, resolves inquiries surrounding the company's default operations, including former document preparation, verification, signing and notarization practices of certain operations. The company previously announced settlements of similar inquiries with the states of Missouri, Delaware and Colorado, leaving the complaint filed by the state of Nevada as the only unresolved attorney general inquiry. As part of the settlements, LPS confirmed its ongoing commitment to stronger compliance and oversight of its operations – and to continue its remediation efforts.
"Today's settlements are another major step toward putting issues related to past business practices behind us," said LPS President and Chief Executive Officer Hugh Harris. "As LPS continues to grow and exercise its leadership in the mortgage industry, we remain committed to enhanced regulatory compliance and operational excellence, which are crucial in our changing industry."
LPS has also continued to resolve outstanding civil litigation. Notably, on Jan. 28, 2013, the company settled the securities fraud litigation brought by St. Clair Shores General Employees' Retirement System, subject to entry of a final order by the federal district court. Additionally, in December 2012, LPS resolved litigation filed by American Home Mortgage Servicing, Inc. (AHMSI).
"We look forward to favorably resolving our remaining regulatory and legal issues in the near future," said Harris.
As a result of these settlements, as well as progress on other outstanding legal issues, LPS increased its legal and regulatory reserve in the quarter ended Dec. 31, 2012, by $48 million (which includes $14 million for the securities fraud settlement that was not previously included in the reserve). As of Dec. 31, 2012, the balance in the company's legal reserve, after the payment of expenses, was $223 million.
In addition to the District of Columbia, the 46 states participating in this settlement are: Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
LPS will announce its complete fourth quarter 2012 financial results after 4 p.m. EST on Thursday, Feb. 7, 2013, and will host a conference call at 10 a.m. EST on Friday, Feb. 8, 2013, to discuss these results.
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