Nevada homeowners file class-action lawsuit over foreclosure robosignings

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When the Las Vegas market hit bottom in early 2012, single-family homes sold for a median $118,000 and, within that, bank-owned homes for $100,000.

Lender Processing Services Inc., the company targeted by Nevada’s attorney general in a foreclosure robosigning investigation, has been hit with a class-action lawsuit filed by Las Vegas and Henderson homeowners.

Jacksonville, Fla.-based LPS, one of the nation’s largest foreclosure processors, has insisted its robosigning problems in Nevada involved mere paperwork issues, have been addressed and did not involve wrongful foreclosures.

But Tuesday’s homeowner lawsuit said LPS’s use of “forged, fraudulent and/or erroneous” foreclosure documents tainted the foreclosure process to the point where LPS and banks it worked with “did not have authority to foreclose or to continue with the foreclosure process.”

The suit filed in Clark County District Court in Las Vegas alleges violations of Nevada’s Deceptive Trade Practices Act, seeks to block pending foreclosures involving allegedly forged LPS documents and seeks unspecified damages for completed foreclosures.

Besides the Nevada attorney general’s lawsuit filed against LPS last week alleging widespread fraud in its foreclosure paperwork operations, criminal charges have been filed in Las Vegas against two LPS officers and four notaries in what state prosecutors call a scheme in which thousands of foreclosure documents were tainted by forged signatures and bogus notarizations.

Also named as defendants in Tuesday’s class-action lawsuit were lenders and foreclosure trustees that work with LPS. They are Bank of America, its subsidiary ReconTrust Co.; IndyMac Mortgage Services, a division of OneWest Bank; and Regional Service Corp., which acts as a foreclosure trustee.

Tuesdays lawsuit was filed by five homeowners and is proposed as a class action representing “countless” more plaintiffs, likely thousands. Four of the named homeowners face foreclosure and the fifth has been foreclosed on, the suit says.

The proposed class of plaintiffs is defined as borrowers in Nevada who received foreclosure documents, called notices of default, “that were improperly executed by LPS, its predecessors or its subsidiaries.”

Tuesday’s lawsuit seeks a court declaration that LPS and its codefendants violated Nevada’s law governing foreclosure proceedings “in that they proceeded with the foreclosure process despite relying upon forged and falsified notices of default.”

“Plaintiffs and consumers have paid the ultimate price through bankruptcies, evictions and foreclosures that were predicated upon false, forged, fraudulent and/or inaccurate documents,” the lawsuit charges.

The suit also seeks a declaration that the notices of default issued by LPS “are null and void” and asks for an injunction blocking LPS and the codefendants from proceeding with the allegedly tainted foreclosures.

“Plaintiffs’ properties face foreclosure as a result of defendants violations of NRS 107.080 (the foreclosure law),” the suit says.

The suit also seeks unspecified actual and punitive damages and attorney’s fees. It was filed by attorneys at the Las Vegas law firm Callister & Associates LLC.

An LPS spokesman said the company had no immediate comment on Tuesday's lawsuit but reiterated its earlier statement: "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."

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  1. "Plaintiffs' properties face foreclosure as a result of defendants violations of NRS 107.080 (the foreclosure law),"

    This could also read "Plaintiffs properties face foreclosure as a result of Plaintiffs not making their house payments."

  2. You would not be in foreclosure status if you were current on your mortgage, I can not see how this suit has any real basis or help to those who were foreclosed on, any one of them could have stopped it by paying their mortgage, most lived in their properties for free for a year or more, what else could they get?