NewburyportNews.com, Newburyport, MA

Local News

January 20, 2013

Southern register of deeds seeks restitution

Filing comes after DocX founder pleads guilty to fraud

(Continued)

“Those documents need to be replaced by whoever is the bank that used DocX to create a document,” Harvey said. “Those documents need to be repaired and the correct document needs to be put in the chain of title.”

The $1.3 million restitution from DocX, which includes fees and the cost of the 2011 audit of documents, would be used to ensure banks create and file valid documents to replace the DocX documents, Harvey said.

Brown filed a guilty plea in federal court in Jacksonville in November to a charge of conspiracy to commit mail and wire fraud.

The deal allows the court to order Brown to pay restitution to any fraud victims. O’Brien, in his filing, cited that part of the plea agreement as the basis for his claim to restitution for Essex County.

Brown has not yet been sentenced.

Attorney General Martha Coakley in December 2011 filed suit against five major banks for, among other things, “pervasive use of fraudulent documentation in the foreclosure process,” according to a press release from her office at the time. Coakley’s office participated in a $25 billion state-federal settlement against those banks for claims that included fraudulent documents. The agreement earmarked $318 million for Massachusetts borrowers for refinancing, loan modifications and direct payments.

Coakley’s office declined to comment on O’Brien’s filing or on whether the attorney general planned to file a similar claim.

Attorneys general around the country sued banks after reports of large lenders using so-called robosigners to sign certifications of certain mortgage-related documents, such as those that show a given bank owns a mortgage. However, many banks could not find the documents proving ownership of mortgages, despite the mortgage assignments they, or companies like DocX, were signing and filing.

Many of those filings are needed in the foreclosure process, and the validity of the foreclosures was cast in doubt after numerous news reports in 2010. Banks slowed down the foreclosure process to review their own processes.

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