Robosigning” was one of the most common uses of credit services in times of crisis. Lending industry has been criticized by the media and the courts for using thousands of false information. In the wake of the scandal, major banks have stopped all pending evictions. For homeowners, the robosigning pot provides an opportunity to deal with their effects in court or to negotiate with banks to avoid harm. Now, robosigning is very rare, but your problem may be unique. Read on to learn more about robosigning and what it can do for you as a homeowner.
A robo-signer refers to an employee of a mortgage servicing company that signs paperwork such as foreclosure documents robotically without reviewing them. Rather than actually reviewing the individual details of each case, robo-signers assume the paperwork to be correct and sign it automatically – like robots. In some cases, software is in fact used to robo-sign. Important points to keep in mind are as follows:
Typically, the bank proves these requisite facts by submitting documents and a written statement signed under oath (called an affidavit) by a person, usually a bank employee or representative, who has reviewed the documents and who is supposed to have some personal basis for believing the facts to be true. The idea is to prevent foreclosures on homes where the foreclosing bank cannot prove that it actually owns the mortgage—which is more common than you might think—or where the homeowner is not actually in default to the degree asserted in the foreclosure papers. In 2010, it was revealed that several large banks routinely used affidavits signed by employees who did not personally review the documents and had no basis for believing that the homeowner was in default or that the bank owned the loan. Employees for financial giants like Bank of America, JPMorgan Chase, Wells Fargo, and GMAC have all testified that they signed many thousands of affidavits a month, spending about 30 seconds on each affidavit, and that they didn’t have a clue regarding the veracity of the affidavit or the documents in question—hence the name “robosigners.” Since the time this scandal broke, it has been revealed that servicers’ employees also robosigned all kinds of foreclosure documents besides affidavits, like assignments of mortgage and other documents needed to foreclose. Robosigning occurred in both judicial and no judicial foreclosures.
A $25 billion settlement among 49 state attorneys general, federal regulators, and five banks was announced in 2012 (the national mortgage settlement) and, in early 2013, federal regulators announced a $9.3 billion settlement with 13 banks over the robosigning scandal and other abuses (the independent foreclosure review settlement).
One company that was involved in the scandal, Bank Processing Services Inc., agreed in 2013 to pay $35 million in fines to resolve allegations over the company’s involvement in the robosigning of documents from 2003 to 2009 and one person plead guilty to criminal charges relating to the scandal.
Banks cannot legally foreclose on a property if the foreclosure paperwork is not in order. This means that if the affidavit or other foreclosure document a bank submits is false—as any document completed by a robosigner would be—the foreclosure should not go through. Of course, the reality is that banks foreclosed on thousands of properties based on just such false affidavits and other documents. Once the issue was revealed, here’s what happened:
In states where foreclosure must go through the court system, more and more judges began taking a closer look at the affidavits and paperwork and refusing to sign off on the foreclosure if the paperwork wasn’t in order.
In states where foreclosure does not go through court, some homeowners brought lawsuits to stop the foreclosure on the ground that false documents have been recorded as part of the nonjudicial foreclosure process.
Robo-signatures of seal warrants are not under strict control of the goods or documents received or discarded, and may therefore confirm or deny valid or unfounded applications. As a result, it can lead to injustice, crime, and even crime. Robo’s signing was spotted a few years ago by journalists and finance officials. In the third and fourth quarters of 2010, the United States was embarrassed to sign fraud involving GMAC Mortgage and major US banks. Banks had to suspend thousands of companies in many countries when it was discovered that the documents were illegal because the signatories had not checked them. While some of the signatories were executives, some were temporary workers who did not fully understand the work they were doing.
The bottom line of this issue is that Doomsday has been won over by Robo signatories. This is due to the fact that it is difficult to work with a lot of work and much is expected of participants. In some cases, the signatories have allowed the court to sign up to 10,000 documents in one month. Instead, the contract may require only basic facts such as the amount of the loan and the name of the lender. All the rest were taken seriously and the documents were signed. While there maybe have been some minimal training offered, robo-signers frequently admitted to not having a complete understanding of the elements of the documents they were signing. This included not being aware of how such documents might be used in court proceedings. Furthermore, the signers were often short-staffed in relation to the overall workload they were assigned to process at times with little or no instructions on how to handle the documents. In addition to signing foreclosure documents with little review time, some robo-signers also introduced new errors, such as miscalculating the value of homes or not reporting the effects an appraisal had on that value. The questionable clerical practices of these workers led attorneys of homeowners who faced foreclosure to move to have the cases thrown out, claiming that the documents had no legal merit. After the existence of robo-signers was made publicly known, forcing foreclosure documents to be reexamined, the workers who engaged in this practice may have faced disciplinary action and termination from the institutions who employed them to perform this task. The lenders, despite not seeing issues with their work prior to the widespread exposure, might fire a robo-signer for not following company policies.
For information on foreclosure defense call us at (877) 399 2995. We offer litigation document review support, mortgage audit reports, securitization audit reports, affidavit of expert witness notarized, and more.