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Banks Still Fabricating Docs, Commiting Foreclosure Fraud

Posted By Barry Ritholtz On September 1, 2011 @ 7:00 pm In Foreclosures,Regulation | Comments Disabled

As hard as it may seem to believe, the largest mortgage servicers are still fabricating documents for use in foreclosures.

That’s according to an article in American Banker, titled Robo-Signing Redux: Servicers Still Fabricating Foreclosure Documents [1].

Key points:

• The practice continues a year after the companies were caught in the robo-signing scandal, even as the industry has been negotiating a settlement with state attorneys general re: loan-servicing abuses.

• Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.

• Some of documents reviewed by American Banker included signatures by current bank employees claiming to represent lenders that no longer exist.

• North Carolina consumer bankruptcy lawyer O. Max Gardner III says servicers and trustees often submit promissory notes in court without proper endorsements, which show the chain of title from one lender to another. Then, after the fact, there will be “a magically appearing note with a stamped endorsement,” Gardner said.

• When plaintiff’s lawyers then try to depose the person whose name is stamped on the endorsement, “we’re being told the person is no longer employed by the servicer or by the party for whom they signed,” Gardner says.

• Linda Tirelli, a New York bankruptcy lawyer, calls such mortgage documents “Ta-Da!” assignments because they seem to appear out of nowhere.

This is why a full investigation must be absolutely mandatory prior to any settlements with the lenders or servicers.

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Source:
Robo-Signing Redux: Servicers Still Fabricating Foreclosure Documents [1]
Kate Berry
AUG 31, 2011 5:47pm EDT     http://www.americanbanker.com/issues/176_170/robo-signing-foreclosure-mortgage-assignments-1041741-1.html

Banks Continue to Fabricate Documents, Commit Foreclosure Fraud [2]
FDL, September 1, 2011


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2011/09/banks-continue-to-fabricate-documents-commit-foreclosure-fraud/

URLs in this post:

[1] Robo-Signing Redux: Servicers Still Fabricating Foreclosure Documents: http://www.americanbanker.com/issues/176_170/robo-signing-foreclosure-mortgage-assignments-1041741-1.html

[2] Banks Continue to Fabricate Documents, Commit Foreclosure Fraud: http://news.firedoglake.com/2011/09/01/banks-continue-to-fabricate-documents-commit-foreclosure-fraud/?utm_medium=twitter&utm_source=twitterfeed

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