Mortgage industry employees are still signing documents they haven’t read and are 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 say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known 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. 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,” said Curtis Hertel, the recorder of deeds in Ingham County, Mich. “It’s still an epidemic.”
In Essex County, Mass., the office that handles property deeds has received almost 1,300 documents since October with the signature of “Linda Green,” but in 22 handwriting styles and with many different titles.
Linda Green worked for a company called DocX that processed mortgage paperwork and was shut down in the spring of 2010. County officials say they think Green hasn’t worked in the industry since. Why her signature remains in use is not clear.
Cutting corners
Some ways robo-signing — signing documents and swearing to their accuracy without verifying information — can work:
•An entry-level employee signs off on mortgage-related affidavits without verifying whether the bank owns the loan or the home owner owes the debt.
•A notary stamps the document but wasn’t present at the time the document was signed.
•The notary signature is different from the one on file with the licensing agency.
•A qualified bank employee signs using numerous titles on behalf of more than a dozen different financial institutions.
The Associated Press
