FDIC Hits Lender Processing Sevices (LPS) with $155 Million Suit, 8k Form Filing

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FDIC Hits Lender Processing Sevices (LPS) with $155 Million Suit, 8k Form Filing

FDIC Hits Lender Processing Sevices (LPS) with $155 Million Suit, 8k Form Filing

According to an 8k form filed on May 10, 2011,

The Federal Deposit Insurance Corporation (“FDIC”), in its capacity as Receiver for Washington Mutual Bank (“WAMU”), filed a complaint on May 9, 2011 in the U.S. District Court for the Central District of California to recover alleged losses of approximately $154,519,000. The FDIC contends these losses were a direct and proximate result of the defendants’ alleged breach of contract with WAMU and alleged gross negligence of the defendants with respect to the provision of certain services by LPS’s subsidiary LSI Appraisal LLC, an appraisal management company. In particular, the FDIC claims that the services provided failed to conform with federal and state law, regulatory guidelines and other industry standards, including specifically the provisions of the Uniform Standards of Professional Appraisal Practice (“USPAP”). LPS previously described the possibility of this suit in its Form 10-Q filed May 5, 2011.

In its complaint, the FDIC cites, as the cause of the damages claimed, 220 appraisals performed between June 2006 and May 2008. However, for more than 75 percent of the appraisals identified by the FDIC, LSI was contracted only to provide reviews of appraisals, not to conduct the initial, full appraisals. For these properties, the full appraisals were provided by other entities, unrelated to LSI. For all appraisals subject to this complaint, LPS believes there is no basis for a claim that LSI engaged in “gross negligence” or breach of contract related to these appraisal services.

LPS stands firmly behind the integrity of the services it provides to the mortgage industry and intends to vigorously defend itself against these allegations.

Source: Edgar Online

H/t Social Apocalypse

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3 Responses to “FDIC Hits Lender Processing Sevices (LPS) with $155 Million Suit, 8k Form Filing”

  1. John Anderson says:

    LPS stands firmly behind the integrity of the fraud services it provides to the mortgage industry and intends to vigorously defend itself, as long as it can, against this allegations.

  2. Elvis says:

    Please post a copy of the suit when you get it, would be a very interesting read…

    Thanks

  3. carol says:

    And what the hell would the FDIC do with that money if they won it? Give it back to the homeowners who were given inflated appraisels? I doubt it.

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