DocX president sentenced to up to 20 years in prison

The Blotter

Tuesday, May 07, 2013

Michigan Attorney General Bill Schuette announced Lorraine Brown, former president of mortgage document processor DocX, was sentenced to 40 months to 20 years in prison on one count of Conducting Criminal Enterprises (Racketeering) for her role in authorizing the fraudulent signing of mortgage documents filed in Michigan.

Brown was sentenced on May 2, by Kent County’s 17th Circuit Court Judge Mark Trusock. Following the sentencing, Brown was remanded to the custody of the Michigan Department of Corrections to begin serving her sentence. Brown pleaded guilty to the racketeering charge on Feb. 11. Brown’s conviction followed an Attorney General investigation into questionable mortgage documentation filed with Michigan’s Register of Deeds offices during the foreclosure crisis.

In April 2011, Schuette launched an investigation after county officials across the state reported that they suspected Assignment of Mortgage documents filed in their offices may have been forged. A “60 Minutes” news broadcast, (The Next Housing Shock) 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. Schuette’s investigation revealed that former DocX president Lorraine Brown, 51, of Alpharetta, Georgia, established and orchestrated a widespread scheme of robo-signing, a practice in which employees were directed to fraudulently sign another authorized person’s name on mortgage documents in order to execute these documents as quickly as possible.

Internally, DocX identified this practice as facsimile signing or surrogate signing. 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. Schuette charged Brown with Racketeering, a 20-year felony, in Kent County’s 61st District Court in November 2012.

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.

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