On May 9, 2011 in the U.S. District Court for the Central District of California to recover alleged losses of approximately $154,529,000. The FDIC’s complaint alleged that these losses were the direct and proximate result of the defendants’ breach of contract with WAMU and alleged gross negligence of the defendants with respect to the provision of certain appraisal services.On November 2, 2011, the court issued an order limiting the FDIC’s claims to breach of the contract and granting the Company’s Motion to Dismiss the FDIC’s claims of gross negligence, alter ego, single business enterprise and joint venture claims. With respect to the limited remaining breach of contract claim, the Company maintains that the Appraisal Outsourcing Services Agreement between LSI and WAMU clearly specifies a $10,000 per claim limitation of liability. The Company is confident that it will ultimately prevail on any remaining breach of contract claim.
FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver of
Washington Mutual Bank,
v.
LSI APPRAISAL, LLC; FIDELITY
NATIONAL INFORMATION
SERVICES, INC.; LENDER
PROCESSING SERVICES, INC.;
LEENDER PROCESSING SERVICES, LLC; LPS PROPERTY TAX
SOLUTIONS, INC., f/k/a FIDELITY
NATIONAL TAX SERVICE, INC.; LSI
TITLE COMPANY;
and LSI TITLE AGENCY, INC.
Posted in STOP FORECLOSURE FRAUDComments Off on COMPLAINT | FDIC v. Lender Processing Services, Inc., LSI Appraisal LLC, Fidelity National Information Services, Inc. et al
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.
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