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What's the problem with a robo-signature?

What’s the problem with a little robo-signature? I have been asking that question of myself? I mean why all the complaints? Are we going to keep lenders from rightfully taking back their collateral just because their employees can quickly sign foreclosure documents?

If people made their payments they wouldn’t have to worry about foreclosure… right? Why make the poor lender spend more than 30 seconds to verify the information that their computer is already telling them? They are already not getting paid lets not ad insult to injury by causing them more expense on a non performing asset.

Don’t hate on me. I am just trying to explore some questions that I have seen asked.

Barack Obama robo-signed? What does this mean?

Barack Obama robo-signed? The robo-signers signature may have been forged no less… What does this mean? Click on this photo for more info.

Essentially some people are saying. “Yea… The lenders should have looked over the foreclosure paperwork but if the borrower hasn’t paid what’s the big deal with foreclosing.” Why make a big deal about a small technicality.

However when it comes to kicking someone out of their home and taking possession of a property titled to someone else… it is no time to be sloppy about paperwork nor is it time to commit perjury (lying under oath) to do it.   Sloppy is how the banks have done it for the last few years. In the last three months 2 of my short sale sellers almost failed to sell because previous lenders had been paid off but years later had still never released the the mortgage liens they had on the properties.

These lenders had received the money but not done their part of the deal and that is simply par for the course for lenders nationwide. Sure most lenders do release mortgages in the required 30 days (or atleast before somone notices they didn’t) however even so they are typically robo-signed and maybe even forged (see Obama’s robo-signing example).  No one notices until they are harmed. Obviously it is legal to release and the corporate intention was there to release the deed and no one will probably find out if the bank officials name was actually forged by someone signing for her.

What is forgery?… i mean attorneys will sign their clients names and put their initials next to it indicating they are signing for this client… you can just tell someone yes sign for me. What are the implications on that?… if you said I could sign your name… and I sign your name just like you do and don’t put my initials next to it, did I forge your name?… but if i did put my initials there I didn’t forge your name?

The ohio revisied code 5924.123 defines forgery as the following:

Any person subject to this code who, with intent to defraud:

(A) Falsely makes or alters any signature to, or any part of, any writing which would, if genuine, apparently impose a legal liability on another or change his legal right or liability to his prejudice; or

(B) Utters, offers, issues, or transfers such a writing, known by him to be so made or altered; is guilty of forgery and shall be punished as a court-martial may direct.

The key is “fraudulent intent?” If there is no intent to harm on the part of the person signing for another there should be no fraud according to my non-legal thinking. However in these cases whether someone else signs the document for the robo-signer or the robo-signer signs this document making a false representation in an sworn statement submitted to the court is fraud. And certainly one way or the other there is fraudulent intent even if the robo-signers justified it in their mind.  They may have families that love them, mouths to feed and they give to the needy and go to church… Fraud is fraud.   And if you make explicit false representations in ways that have a massive impact on folks lives in the way that foreclosure does… and you do this thousands of times a month there must be consequences both to you and to your employer that required you as part of your job to make these false statements.

The fraud on the part of the lenders does not take away the borrowers obligation to pay the debt. But there in lies the other issue regarding all this robo-signing. Lenders use these same robo-signers to sign all sorts of documents including mortgage releases and assignment of interest in a mortgage. This brings up a bigger issue than creating a false affidavit. According to Cuyahoga county foreclosure defense expert and bankruptcy Attorney Eli Tamkin, For current foreclosures, lenders should be able to have someone review the case and then properly sign the foreclosure affidavit and then refile the foreclosure after everything has been verified. Yes it’s a bit more expensive to do it properly but the lenders can do that.  Oh you poor bailed out lenders you.

You signed for real. The bank signed for fake. What to do kno

You likely signed the mortgage even if the bank signed it with a robosigner. So who do you really owe?

However the deeper issue regarding improper signing of documents and following proper procedure is that just as the major servicers have almost universally been filing foreclosure illegally, they have often made grave errors in transferring ownership of these loans. Also even standard industry practices for the transferring of the ownership of loans are now being seriously questioned. For the past several years it was the “in thing” during foreclosure defense to ask the foreclosing lender to actually produce the original paperwork showing that they actually owned the mortgage they were foreclosing on. Sometimes the lender would not be able to prove they owned the loan however usually they could bring some sort of paperwork and it would be typically be assumed that this paperwork was valid. Typically this defense strategy would more work as a delay than a true defense as the general assumption by all parties in the court room was that yes this defendant actually does owe the money and no this plaintiff would not actually be so bold as to file this foreclosure if this defendant didn’t have a mortgage with them.

Would a lender really be collecting payments all this time if they didn’t rightfully own this mortgage?
There in lies the question that no one really asked. At least no one heard it asked.

Adam Levitin, a Georgetown University Law professor who specializes in  financial regulatory issues, mortgage finance. Levitin says the documentation problems involved in the mortgage mess may have the potential “to cloud title on not just foreclosed mortgages but on performing mortgages.”  He is also quoted by CNBC as saying giving the following potential scenario:

The mortgage is still owed, but there’s going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying give me my money back, you’re stealing my money. You’re going to then have trusts that don’t have any assets that have been issuing securities that say they’re backed by a whole bunch of assets, and you’re going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they’re going to do, and you’re going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring.

So we will see. Just today I had a foreclosure canceled for a short sale I have been working on and I hadn’t yet even tried to get it canceled. I hope that what this mess does is breath some sense into the mortgage industry here in the U.S. and create more fair programs for borrowers.

Please see the following video from CNBC.
Andy Morris is an Ohio real estate broker with an expertise in selling homes on a short sale. If your Ohio home is heading towards foreclosure or you owe more than your property is worth, please call Andy at 888-4-STOP-IT to see if you qualify for a short sale with your lender. Are you not in the North Eastern Ohio area? His team can negotiate short sales across the United States.

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