Mortgage Fraud Defendant Pleads Guilty to Racketeering in MI
Lorraine Brown, founder of the now-defunct mortgage document processor DocX, has pleaded guilty to racketeering in Michigan, where she faces a possible 20-year prison sentence.
Our Miami foreclosure lawyers however would not be surprised if she was given significantly less time, considering she faces a maximum of five years in prison for a guilty plea after pleading guilty to criminal conspiracy to commit mail and wire fraud in a federal court in Florida.
The 51-year-old’s sentencing in the Michigan case is slated for the beginning of May.
You may recall that Brown’s DocX firm was a subsidiary of Lender Processing Services, Inc. She has admitted to participating in a six-year scheme to produce fraudulently signed and notarized mortgage documents across the country – more than 1 million in all.
As the U.S. Attorney in that case noted, home ownership is a huge step for most people. The process is long and intimidating, and people rely and put their trust on the integrity of those who are facilitating the deal. What Brown and others like her did was more than simply gross negligence. It was a deep and egregious violation of trust, done intentionally with the sole purpose of increasing her own personal wealth – no matter who was hurt.
Although the federal case effectively settled the criminal question in a number of states, including Florida, Michigan launched its own investigation into practices that affected residents in that state. That investigation followed an April 2011 report in which it was revealed that thousands of mortgage and foreclosure documents were reportedly signed by the same woman – but with numerous variations in handwriting. County officials in Michigan discovered this same phenomenon repeated in most of their own districts. They reportedly found more than 1,000 instances in that state alone. An untold number of others may remain in the system.
It was later found that Brown and DocX were sanctioning this “robo-signing” effort, encouraging workers to forge the signature of a person who would actually be authorized to sign off on the paperwork. Because DocX was being paid by the number of documents its workers were able to churn out, it was in the company’s best interest to simply fly through as many as it possibly could – regardless of whether those documents were in fact accurate. Internally, DocX had its own name for this: surrogate signing. That’s a really nice way of saying “fraud.”
Of course, the courts have for the most part given banks the benefit of the doubt, calling them victims in all of this – even though they were benefiting from this process. A federal judge even said LPS had no knowledge of the scheme – a claim which is either untrue or makes them incredibly inept. Both are likely.
In addition to accepting Brown’s guilty plea, Michigan authorities also reached a $2.5 million settlement deal with LPS.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.