Mortgage ‘Robo-Signing’ Still Running Rampant

It seems that some people never learn. After last year’s suspension of foreclosures due to suspicious signatures and questionable paperwork, it seems that banks and mortgage processors are at it again.
Employees are still signing documents that they haven’t read and using fake signatures as a way to speed up the foreclosure process – a practice that critics say points to a systemic problem with the paperwork involved in home mortgages and titles.

Since last fall, at least three states have openly admitted to receiving thousands of mortgage documents with questionable signatures. This “robo-signing” of documents is what led to the nationwide shutdown of foreclosures last fall.

According to the AP:

Banks and mortgage processors haven’t acted aggressively enough to put an end to widespread document fraud in the mortgage industry.

Robo-signing refers to a variety of practices. It can mean a qualified executive in the mortgage industry signs a mortgage affidavit document without verifying the information. It can mean someone forges an executive’s signature, or a lower-level employee signs his or her own name with a fake title. It can mean failing to comply with notary procedures. In all of these cases, robo-signing involves people signing documents and swearing to their accuracy without verifying any of the information.

Most of the tainted mortgage documents in question last fall were related to homes in foreclosure. But much of the suspect paperwork that has been filed since then is for refinancing or for new purchases by people who are in good standing in the eyes of the bank. In addition, foreclosures are down 30 percent this year from last. Home sales have also fallen. So the new suspect documents come at a time when much less paperwork is streaming through the nation’s mortgage machinery.

While so far no individuals, lenders or paperwork processors have been charged with crimes, the Michigan Attorney General in June issued criminal subpoenas to several firms that process loans for banks, including Lendor Processing Services, a subsidiary of Fidelity.

Read the entire text of the AP article here.