Schuette Announces Guilty Plea for Former Mortgage Processor President Responsible for Fraudulent Robo-Signing Scandal

Contact: Joy Yearout 517-373-8060

February 11,  2013

         LANSING - Michigan Attorney General Bill Schuette today announced Lorraine Brown, former president of mortgage document processor DocX, pleaded guilty to racketeering for her alleged role in authorizing the fraudulent signing of mortgage documents filed in Michigan.  Brown pleaded guilty today to one count of Conducting Criminal Enterprises (Racketeering), a 20-year felony, before Kent County Circuit Court Judge Mark Trusock.  She will return for sentencing on May 2, 1:30 PM.  The guilty plea follows an Attorney General investigation into questionable mortgage documentation filed with Michigan's Register of Deeds offices during the foreclosure crisis. 

 "Shortcuts like robo-signing are just one part of the mortgage foreclosure crisis," said Schuette.  "The message here is clear - if you break the law, there are consequences.  We will continue to prosecute criminals who target and exploit Michigan homeowners."

In April 2011, Schuette launched an investigation after county officials across the state reported that they suspected Assignment of Mortgage documents filed in their offices may have been forged.  A "60 Minutes" news broadcast had shown that the name "Linda Green" was signed to thousands of mortgage-related documents nationwide, but with many different variations in handwriting.  County officials in Michigan reviewed their files and found similar documents, thus raising questions about the authenticity of the documents filed.

As part of his investigation, Schuette reviewed documents filed in Michigan and prepared by DocX, a document processing company located in Georgia.  DocX processed mortgage assignments and lien releases for residential lenders and servicers nationwide.  Schuette's investigation revealed that former DocX president Lorraine Brown, 51, of Alpharetta, Georgia, allegedly established and orchestrated a widespread scheme of "robo-signing," a practice in which employees were directed to fraudulently sign another authorized person's name on mortgage documents in order to execute these documents as quickly as possible.

Internally, DocX identified this practice as "facsimile signing" or "surrogate signing."  Schuette alleges that from 2006 through 2009, these improperly executed documents were created and recorded at Brown's direction.  Schuette's investigation revealed that more than 1,000 unauthorized and improperly executed documents were filed with county registers of deeds throughout Michigan. 

In addition to the criminal charge brought against Brown, Schuette announced on January 31, 2013 that he had reached a $2.5 million civil settlement with Lender Processing Services, Inc., the parent company of the now defunct DocX.  The settlement funds will go to the State of Michigan, and the legislature will decide how they will be spent.  Affected consumers will have their documents corrected by LPS. 

Earlier this year, Schuette joined 48 other state attorneys general in entering into a settlement with the five leading bank mortgage servicers. The settlement addresses allegations of faulty foreclosure processes and poor servicing of mortgages that harmed Michigan homeowners. The settlement also requires comprehensive reforms of mortgage loan servicing to improve customer service for Michigan borrowers.  More information on the 2012 Mortgage Settlement is available on the Attorney General's Website at www.michigan.gov/mortgagesettlement.

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