Robo-Signing Redux: Servicers Still Fabricating Foreclosure Documents by Kate Berry, Aug 31, 2011 5:47pm EDT
Some of the largest mortgage servicers are still fabricating documents that should have been signed years ago and submitting them as evidence to foreclose on homeowners.
The practice continues nearly a year after the companies were caught cutting corners in the robo-signing scandal and about six months after the industry began negotiating a settlement with state attorneys general investigating loan-servicing abuses.
Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.
While the banks are engaging with the Obama administration and states Attorneys General led by Iowa’s Tom Miller they are simultaneously persisting in the fraudulent practices of backdating documents and fabricating ownership.
The AMerican Banker article describes specific examples they uncovered.
The banks are pushing the state AGs to settle and release the banks from liability for fraud while they are continuing the fraud.
"It's one thing to not have the documents you're supposed to have even though you told investors and the SEC you had them," says Lynn E. Szymoniak, a plaintiff's lawyer in West Palm Beach, Fla. "But they're making up new documents."
These banks logically and physically destroyed any official documents of ownership during the securitization of mortgages so to foreclose they are making up false documents.
According to a document submitted in a Florida court by Bank of America Corp., bank assistant vice president Sandra Juarez signed a mortgage assignment on July 29 of this year that purported to transfer ownership of a mortgage from New Century Mortgage Corp. to a trustee, Deutsche Bank. Two problems with that: New Century, a subprime lender, went bankrupt in 2007; and the Deutsche Bank trust that purported to hold the loan was created for a securitization completed in 2006 — about five years before Juarez signed it over to the trust. (Bank of America, as the servicer of the loan, was seeking to foreclose on behalf of the trust and its bondholders.)
The 50-state collaboration to negotiate with the banks should be halted and replaced by 50 special prosecutors.