Lender Processing Services (LPS) has agreed to pay $14 million to settle claims the company deceived investors about its business practices.
The agreement would end a lawsuit filed in 2010 that charged the mortgage processing company with entering into improper fee arrangements with attorneys, signing documents without regard to their accuracy and other practices designed to push through as many foreclosure as possible over roughly two years starting in July 2008.
Investors charged that the company's stock price fell 18% following a series of disclosures in 2009 and 2010 by Jacksonville, Fla.-based LPS.
"We're obviously happy with the settlement and the opportunity to return some money to shareholders who lost money as a result of the company's practices," Jonathan Gardner, an attorney for the investors, told American Banker.
Though the investors have not said how much money they allegedly lost, Gardner termed the settlement "a significant recovery."
An LPS spokeswoman did not respond immediately to a request for comment.
The proposed pact, which was filed recently with the U.S. District Court in Jacksonville, follows an agreement in January by LPS to pay $127 million to settle similar charges by 46 states. News of the proposed settlement was first reported by Reuters.
LPS continues to face claims from shareholders and regulators that tie to its practices during the financial crisis, though the company has cleared litigation against it sufficiently enough to lower its reserves for legal and regulatory matters to $61.1 million in the first quarter, down 73% from three months earlier, according to its latest quarterly filing with the Securities and Exchange Commission.
In March, Senator Ron Wyden, D-Ore., called on the Department of Justice to investigate LPS for double-billing of foreclosure-related legal fees. The company has countered that Wyden's claims are incorrect and said that the fees were not billed to or recovered from homeowners.