In April, fourteen of the nation’s biggest banks promised federal regulators they would stop robo-signing documents to foreclose on homes. This was part of a settlement to clean up the foreclosure mess caused by wild lending of the banks.
Nearly 8 months ago, the banks were caught red handed fraudulently creating fake documents because they lost track of the originals in the haze of creating mortgaged-backed securities. Why is this still going on? More importantly, why aren’t bank executives going to jail instead of letting them off the hook? Many have called this outright organized crime!!! The implications of this, to me, say the mortgage industry and bankers are panicked and desperate. It also signals the real estate market will not recover for many years.
The story that follows is a must read from the Associated Press:
“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.
County officials in at least three states tell The Associated Press they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as “robo-signing,” remain widespread in the industry.
The documents have come from several companies that process mortgage paperwork, and have been filed on behalf of several major banks. One name, “Linda Green,” was signed almost two dozen different ways. Lenders say they are working with regulators to fix the problem but cannot explain why it has persisted.
Last fall, the nation’s largest banks and mortgage lenders, including JPMorgan Chase, Wells Fargo, Bank of America and an arm of Goldman Sachs, suspended foreclosures while they investigated how corners were cut to keep pace with the crush of foreclosure paperwork.
Critics say the new findings point to a systemic problem with the paperwork involved in home mortgages and titles. And they say it shows that banks and mortgage processors haven’t acted aggressively enough to put an end to widespread document fraud in the mortgage industry. “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.” (For the complete AP story Click here.)