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Lawsuits allege fee-splitting at Prommis, LPS

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The class action lawsuit accused the defendants of breaching their trustee’s duties in the foreclosures. The borrowers also alleged that the law firm engaged in impermissible "fee-splitting" with the non-lawyer referral company LPS. A foreclosure trustee is forbidden from purchasing the property at the sale.

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Chapter 13 Bankruptcy Trustee Sues Three Foreclosure Companies.. The couple alleges that the defendants conspired in an illegal "fee-splitting" arrangement that resulted in unlawful fees being charged and being hidden from the Bankruptcy Court.. LPS then split some of the fees with Prommis.

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ARE YOU A VICTIM OF WELLS FARGO’S PAIN? Saturday, April 23, 2011.. The issue of fee-splitting isn’t new. It arose in a 2008 houston bankruptcy case involving Ernest and Mattie Harris.. LPS and LPS Default Solutions of illegally splitting attorney’s fees as part of their contractual.

Also, LPS faces lawsuits that allege that the company engaged in illegal fee-splitting arrangements with law firms in exchange for referrals in bankruptcy and foreclosure cases. The company denies these allegations and said that when it discovered potential problems with the foreclosure documents that it shut down the DocX operation.

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