Robo signing scandal may have occured on herndon va real estate

Despite widespread media coverage, public outrage, federal and state investigations, and promises by the banks themselves to stop, "robo-signing" continues by many lenders in many states, according to separate new investigations by Reuters and The Associated Press.



The Associated Press says, "Mortgage industry employees are still signing documents they haven't read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures."



Writes Reuters:
Reuters has found that some of the biggest U.S. banks and other "loan servicers" continue to file questionable foreclosure documents with courts and county clerks. They are using tactics that late last year triggered an outcry, multiple investigations and temporary moratoriums on foreclosures.
In recent months, servicers have filed thousands of documents that appear to have been fabricated or improperly altered, or have sworn to false facts.

"Bruising scandal"

"Robo-signing" is slang for document-handling practices ranging from sloppy to illegal. Bank and mortgage company employees forge signatures, use phony titles or sign and notarize legal documents without verifying what's in them.



Some say it involves careless but harmless shortcuts. Others -- including some courts -- call the actions illegal and say they undermine the integrity of the system of property records on which property ownership rests.



"Increasingly, though, courts are holding that the trusts suing to foreclose don't actually own the mortgages," says Reuters.



Significantly, the Massachusetts Supreme Judicial Court overturned a foreclosure in January. One justice wrote that "foreclosure is a powerful act with significant consequences" and has to be done legally.



"America's leading mortgage lenders vowed in March to end the dubious foreclosure practices that caused a bruising scandal last year," Reuters says.



But Reuters reporters found 1,000 mortgage assignments with various problems and inaccuracies when reviewing case files from attorneys and combing online databases in Florida, Massachusetts, New York, and North and South Carolina.



The AP reports that "county officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall." The story quotes county officials in Massachusetts, Michigan and North Carolina.



Phony signatures

The AP investigation focuses on phony signatures on legal documents used to foreclose. Previously, investigators and attorneys had identified a number of signatures believed to be bogus. These signatures are still showing up in an improbable number of documents and often appear to be done by many different hands, the AP says.



Banks that acknowledged problems blamed them on overworked employees and offices overloaded with a flood of foreclosures.



Last fall, robo-signing problems showed up among foreclosure documents. Now, though, the AP says, robo-signing turns up in refinancing and new purchases and affects borrowers in good standing.
"Robo-signing is not even close to over," says Curtis Hertel, the recorder of deeds in Ingham County, Mich., which includes Lansing. "It's still an epidemic."

Robo-signing worsens the crisis

The housing crisis began when the price bubble burst, taking inflated values back to earth in most parts of the U.S. Where too many new homes had been built by speculating developers -- mostly in Nevada, Florida, California and Arizona -- the speculating buyers disappeared, causing real estate markets to collapse.



Initial defaults and foreclosures were by homeowners who'd bought flimsy mortgages with unsustainable payments. More were triggered by unemployment, the prime cause today.