GRAND RAPIDS (WWJ/AP) – The former president of a mortgage document processing company has been sentenced to up to 20 years in prison on a racketeering charge in a Michigan case.
Lorraine Brown pleaded guilty in February and was sentenced in Kent County on Thursday. Circuit Judge Mark Trusock ordered Brown to serve 40 months to 20 years.
The state says the 51-year-old Brown orchestrated a robo-signing scheme, in which employees fraudulently signed another authorized person’s name on mortgage documents to expedite foreclosures.
In April 2011, Attorney General Bille Schuette launched an investigation after county officials across the state reported that they suspected 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, including in Michigan.
Schuette’s investigation revealed that Brown, former DocX president, established and orchestrated a widespread scheme of robo-signing. Internally, DocX identified this practice as “facsimile signing” or “surrogate signing.” The state said 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 2012, Schuette joined 48 other state attorneys general in entering into a settlement with the five leading bank mortgage servicers. The settlement addressed allegations of faulty foreclosure processes and poor servicing of mortgages that harmed Michigan homeowners. The settlement also required comprehensive reforms of mortgage loan servicing to improve customer service for Michigan borrowers.
For more information on the 2012 Mortgage Settlement, visit www.michigan.gov/mortgagesettlement.
Brown separately pleaded guilty to a federal charge in Florida last year and reached a plea agreement on related state charges in Missouri.
TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.