by Brian Mahany
A couple years ago, the foreclosure industry was paralyzed when evidence of widespread robosigning came to light. Tens of thousands of foreclosures were put on hold while banks promised to review their paperwork. For those not familiar with the definition of the term “robosigning”, the term refers to a bank practice of having someone sign off on mortgage documents without actually reviewing them. Sometimes the banks employed temp workers who were clueless as to what they were doing or signing yet they signed thousands of documents per day and certified that they were accurate.
The scandal originally came to light in the 3rd quarter of 2010 yet 2 yeas later, it is still happening. A review by American Banker 1 full year after the scandal broke found that Bank of America, Wells Fargo, Ally Financial and OneWest were routinely backdating mortgage paperwork in order to proceed with foreclosure.
We are aware of one case in which a Bank of America vice president purported to “sign” a mortgage assignment on behalf of New Century Mortgage. There were two problems with that assignment, however. First, New Century had been out of business for 4 years by the time the assignment was “signed” and second, securities and tax rules generally require certain assignments to be made within 60 days.
(We put “signed” in quotation marks because we have often seen multiple different signatures for the same person, another indication of robosigning. Instead of having temp workers sign their names to mortgage documents, the trend now is to have temp workers forge the name of bank officers on important documents.)
A spokesperson from Bank of America reportedly said that mortgage assignment documents are merely “procedural steps.” Others, however, believe that lenders and servicers should have to prove that they have the right to enforce the debt.
Unfortunately, few homeowners have the might to fight the banks. Obviously, if struggling homeowners had money for lawyers, they would probably be using that money to make mortgage payments.
Courts are in a quandary as to how to address the problem. More and more judges have been forcing banks and their lawyers to prove their right to foreclose. Others courts, however, have been reluctant to allow people to stay in a home for which they are not making payments. These judges believe that no one should get a “free house.”
Unfortunately, the paperwork practices of many banks are a disgrace. Often the original mortgage documents have gone missing. (Usually there is a recorded copy with the register of deeds, however.) Banks generally know how they acquired title to the mortgage but have no paperwork to prove their ownership.
What does the future look like? It’s unlikely that most missing loan documents will ever be found. In many cases, they simply don’t exist. For now, courts generally decide each case one at a time. Lenders will often dismiss the case without prejudice meaning they can refile at a later time. Unfortunately, neither of these actions solve the underlying problem.
The lender liability and fraud lawyers at Mahany & Ertl sue banks and mortgage companies for fraud. We are not a traditional foreclosure defense firm. Rather, our experience is in suing banks and servicers and seeking monetary damages for forgery, fraud and similar misdeeds.
If you are in immediate danger of losing your home, consider a local foreclosure defense or bankruptcy firm. If you feel that you have been victimized by a bank, however, and believe you are entitled to damages then give us a call. We have helped people across the United States and currently have the largest federal false claims act case in the nation against a lender – the $2.4 billion mortgage fraud case against Allied Home Mortgage.
For more information, contact attorney Anthony Dietz at or by telephone at (248) 789-5551. All inquiries are protected by the attorney – client privilege and kept in strict confidence. We will gladly work with your local foreclosure lawyer.
Mahany & Ertl – Giving Homeowners A Voice. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine and Minneapolis, Minnesota. Services available in many jurisdictions.