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