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It's been a rocky 18 months for Lender Processing Services. In summer 2010, regulators began investigating whether LPS and its former parent, Fidelity National Financial, had forged documents to help mortgage servicers expedite foreclosures. In the ensuing months, the scrutiny grew to include a number of LPS's large mortgage lender/servicer clients.
The resulting "robo-signing" scandal jolted mortgage finance and briefly brought much of the nation's pending foreclosure activity to a screeching halt.
As the regulatory noose tightened last spring, LPS was one of two technology and services providers that, along with the nation's 10 largest mortgage servicers, submitted to a multi-agency review and subsequent consent order that requires the company to conduct external and internal reviews of its policies, procedures and risk management processes.
Then, as LPS began the process of meeting the consent order requirements, president and CEO Jeffrey Carbiener abruptly resigned to address what the company has described as significant health-related reasons.
While a committee searches for Carbiener's replacement, LPS Chief Operating Officer Dan Scheuble and Chief Financial Officer Tom Schilling continue to lead various components of LPS and are assisting interim CEO Lee Kennedy in running the company.
LPS is both a technology developer and a services provider in the origination, servicing and data and analytics sectors. Its flagship software, Mortgage Servicing Package, is the system of record for more than half of all mortgages serviced in the U.S.
Despite the challenges, Scheuble says the future is bright for the Jacksonville, Fla.-based company. And as he recently explained in an interview with Mortgage Technology, there's even a silver lining in the consent order for LPS.
MT: What's your view of the past year in the mortgage industry?
Scheuble: Last year was probably one of the most incredible years in the history of mortgage finance. From a technology and services perspective, there were dramatic changes in the overall business that impacted our customers and impacted us directly, which could be summarized as regulatory pressures.
MT: What does that mean for LPS?
Scheuble: First of all, the process of creating a new loan will continue to be dramatically altered. When you're talking about underwriting, verification of income, analytics, whatever it is, the way we manufactured loans in the past obviously didn't work.
Second,...