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Naked Capitalism: Robo-Signing an Ongoing Plague


It’s been five years since widespread foreclosure fraud, sometimes referred to as the “robo-signing scandal,” was first revealed. You may recall, this was a type of fraud that involved banks and mortgage servicers colluding to produce false documentation of property ownership they did not actually have in order to obtain foreclosures on those properties. Countless homeowners lost their homes when these documents were presented as true and accurate before the courts.

There was a weak attempt at accountability for this mess that ultimately resulted in a $25 million National Mortgage Settlement among the five leading mortgage servicers. Although it never should have happened in the first place, that settlement should have been the end of it. But now, the respected financial news and analysis blog Naked Capitalism asserts it has proof that such practices have continued.

As proof, writer David Dayden presents an email sent to a former mortgage industry loan officer-turned-licensed private investigator specializing in securitization and chain of title analysis. He’s often tapped as an expert witness for foreclosure defense attorneys. The email is from a document services provider working for large mortgage firms. That services provider promises clients “peace of mind” that if documents are missing in a mortgage recording, their highly-trained researchers will locate and record these documents. Essentially, they are creating plausible deniability for fabrication of mortgage records.

The email to the investigator and known defense witness requests a signature for an assignment of mortgage. The investigator, who spoke to Dayden, said this isn’t the first time he’s been solicited for such a request. His theory is that these companies seem to be attempting a form of entrapment. If they can get him to sign on a forged record, it would indicate he is complicit in foreclosure fraud and tarnish his reputation and credibility as an expert defense witness. Alternatively, maybe they really did just need someone to help produce this mortgage assignment, and his name came up because he’d previously worked for the bank that needed it.

It’s worth noting that this same company was just fined $1.6 million in restitution and civil penalties by the Consumer Financial Protection Bureau for not honoring modifications for loans transferred to them by other servicers.

The investigator at first “plays dumb,” asking for more information from the firm. The company responds by again indicating that an assignment is needed to show the bank assigned the loan over to the services firm. The “team lead” who had been communicating with the investigator attached a copy of the mortgage – which included confidential information that likely violated privacy laws.

Investigator then asks for a “prepared assignment,” or essentially a template from the company to fill out. Company responds with an attachment with blanks for investigator to fill in. It’s pre-signed and pre-notarized, with amounts that differ from the actual note (indicating the company wanted the document to appear as if it was first created in 2002).

Dayden characterizes this as “solicitation to commit a felony,” specifically, to fabricate a mortgage document.

The investigator says that by “recreating chains of title,” they are dumping “garbage” into the courts daily.

Catching this kind of flaw in the chain of documentation requires the help of an attorney who is familiar with the tricks of those on the other side of the courtroom aisle.

If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.

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