Journalism in the Public Interest

Ahead of Congressional Hearings, Robo-Signer Scrutiny Spreads


In a videotaped deposition, Bryan Bly, an employee at Florida-based Nationwide Title Clearing, a firm that processes mortgage assignments, testified that sometimes his signature would be added electronically to documents he had never seen. (The Forrest Law Firm/YouTube)

Several recent reports about robo-signers have brought fresh attention to another angle of the foreclosure scandal: Robo-signing didn’t just occur in the foreclosure process. It also occurred in the processing of mortgage assignments. Mortgage assignments are documents showing a loan’s transfer of ownership—transfers that happened over and over when Wall Street firms began buying, bundling, and securitizing these bundles to sell to investors. That’s why assignments are key to establishing who has the right to foreclose.

In videotaped depositions taken and uploaded earlier this month, employees at Florida-based Nationwide Title Clearing testified to signing thousands of documents each day, often as executives of other companies. And sometimes the signing itself really was automated. One employee, Bryan Bly, testified that his signature would be added electronically to documents that he’d never even seen. (Huffington Post pulled together several clips from the taped depositions, and you can watch them here.)

An official from Nationwide Title told Bloomberg News that producing electronic signatures in bulk is common in the industry, and that “the laws are still catching up” with this documentation practice. (Legal aid attorney Gloria Einstein, however, told Bloomberg the problem isn’t that the signature is electronic—it’s that “nobody is responsible for the information and the decisions.”)

Nationwide Title Clearing, much like Lender Processing Services, processes mortgage assignments—documentation transferring ownership of a loan when a mortgage is sold. They’re sometimes handled in-house by servicers but may also be contracted out to companies like Nationwide Title, which claims to be the largest third-party processor of mortgage assignments.

To speed the process, banks often authorized employees at processing companies to sign on their behalf using executive-sounding titles—never mind that the workers weren’t bank employees. (This much isn’t new—employees at LPS did the same thing when the company was still executing affidavits. LPS stopped executing affidavits in 2008, but still does mortgage assignments.)

Bly testified that he may have signed using the title of “Vice President” for as many as 20 different banks. He also testified that he signed off on about 5,000 of these mortgage assignments each day, but when asked by lawyers what a mortgage assignment is, he answered, “I’m really not sure,” the St. Petersburg Times reported on Friday. (A press release from the company quoted Bly saying later that he “of course” knows what a mortgage assignment is, and simply got flustered when questioned on camera by multiple lawyers.)

Improper mortgage assignments or transfers of loan ownership are separate from the affidavits improperly processed by the robo-signers who sparked the scandal, but they are “the largest and most complex harm that may exist with loans in default or foreclosure today,” according to Katherine Porter [PDF], a University of Iowa law professor and expert on mortgage servicers.

Bloomberg has more on why these documents cause major problems for banks and investors when they go missing or are executed improperly (For more, you can also reference this primer by CNBC):

Assignments, which are usually recorded with county land record departments, list the buyer and seller of a loan as it’s sold or packaged with other loans into a mortgage-backed security. Lawyers for homeowners are challenging the legitimacy of the documents, which are relied on by lenders to show they have the right to foreclose.

This afternoon, the Senate Banking Committee will hold a hearing to investigate improper or fraudulent servicing and foreclosure processing.

Another hearing scheduled for Thursday before a subcommittee of the House Financial Services committee will focus on robo-signing and the proper transfer of title.

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The mortgages were packaged and sold (CDO’s) to the investment community.  These same CDO’s were re-sold, re-packaged and “re-gifted” many times over.  A credit strategist at Citi (Matt King) estimated that a CDO squared purchase would require reading of about 1,125,000,300 pages to fully understand what it consisted of (that’s right, over 1 billion pages!!).  These CDO’s were split up, chopped, sliced, and diced in more ways than Vince could ever cut up an onion with his Slap Chop.  Of course no one knew what they were signing, it was virtually impossible to know.  Then again, they didn’t need to, the Banks Bff’s, the rating agencies, kindly branded the garbage with their investment grade stamp.  It was a new paradigm in investing, no reading required.

Principal reductions down to the fair market value of the home must accompany every modification… After all that is what the lender/investor will get if foreclosed upon, so why not do it proactively and keep people in their homes… Everyone should threaten to sue their lenders and the settlement should be principal red and interest rate adjustment so people can stay in their homes.  That will stabilize the market…
Everyone underwater should stop making payments and force this to happen!

shhh, be outraged quietly, please.
Timmy G., BHO’s little cool friend, is dozing. Don’t wake him, he hates this technical stuff.
shut the hearing room door *quietly* so as not to rouse the Office of Controller of the Currency. ya know, the folks making six-figure salaries (thanks taxpayers!) to monitor banking activity.
pipe down over there, Phyllis Caldwell (“homeowners benefitted just by applying for HAMP”) is trying to nap.
geez, the rabble on this site is noisy.
let the Fed sleep! good lord, they might wake and stop the fraud….then who would fund the pols’ campaigns??

Barbara Ann Jackson

Nov. 18, 2010, 1:10 p.m.

Current Congressional hearings on Hearing on Mortgage Services and Foreclosure Practices are exercises in futility unless such includes a THOROUGH probe of the LETHAL role of lawyers regarding mortgage and real estate repossessions!  It alarms me that the ‘Elephant in the Room’ (hiding in plain sight) continues to not undergo investigation!  Foreclosure fraud is IMPOSSIBLE WITHOUT an Officer-of-the-Court (a lawyer) filing civil, as well as bankruptcy judicial pleadings! 
Investigations exclusive of the very lawyers who file court pleadings seems like a dog and pony show. Lawyers are required to prosecute legal claims by means of law, rather than predilections!  Even if / when mortgage lenders instruct lawyers to file inappropriate or unlawful documents, a LAWYER is obligated to advise what can and cannot be lawfully done! 
Our nation’s mortgage crisis has finally caused serious pondering of factors that indicate a mammoth creature (I am certain it is the judicial elephant!) might be the driving force for this incredible Banking debacle!

For myself, and people who ask me to help, I HOPE a graphic TRUE STORY, spelling out methods that judicial systems are utilized to accomplish fraudulent real estate conveyances, and unlawful collections, is a catalyst for needed CHANGE.  The epitomizing foreclosure story is found here:

Foreclosure Fraud Assault - A Cry For Help

“A foreclosure that entails savagery, fraud, corruption, greed, intrusion, peril, trauma, desolation, shocking deviation from established law and court rules and procedures, and reprisals for whistleblowing and for not relinquishing one’s home to sham foreclosure is a riveting story worth being told.
The victim’s painful story comes with a plea for humanity to rise to a duty of raising awareness, and not merely for the sake of aiding this one victim. It is for the sake of calling attention - and hopefully “making a difference” by requiring lawmakers to make changes in what appears to be third-world judicial systems of shocking perversion and inequality, harmful to the entire economy.

Encapsulated in the story “Foreclosure Gang Rape,. . .,” the victim’s graphic details of years of harm from lawyers, judges, and banks summed up as ‘gang rape’ is commensurate with defilement, exploitation, humiliation, bigotry, betrayal, invasion, revilement, assault, depredation, torture, despoliation, stigmatization, maltreatment, denigration, ruin, pillage, ransack, intrusion, and racism.

Wells Fargo turned over the modified loan debt to a foreclosure mill debt collection lawyer who used a defunct lender’s identity to foreclose, as well as demand unfair fees. At some point after foreclosure had been filed, the victim discovered that the modification consisted of a contract between the homeowner and a fictitious lender. . .”

If I were an alien space invader just coming down to earth to check out the inhabitants, see how gullible they are and how easily they would surrender putting up no fight, I’d think I hit the big time.

Earthlings mostly HAVE NO IDEA the scope of the fraud and it is not just foreclosures but the debt buying industry as well using the same robo-affidavits signed by taco slingers and the like.

The attorney who filed this class action lawsuit details is 85 pages in living technicolor how Midland - Encore group of companies buys debt for pennies on the dollar and then gets default judgments in most cases with the use of these fake robo-affidavits.

I have a case almost identical to the ones in the Washington class action.  He responded to my email and asked me to scan my docs and send them to him which I did and I’m looking forward to hearing from him.

At the end of this url if you open it is a link where you can download the whole beautiful/sordid details.  Thousands of times a day people are getting default judgments against them when the companies have ZIP for proof.

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Dec. 15, 2010, 1:49 a.m.

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I like your site design. Looking forward to reading more down the road.
Cu Soon

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