Investigators find negligence, fraud in foreclosure fiasco.
“Robo-signing” represents “just the tip of the iceberg” CNNmoney reports, adding investigators have “uncovered a morass of serious paperwork problems.”
In the last three weeks, revelations about forged and rubber-stamped documents triggered inquiry into more than 125,000 sets of foreclosure papers filed by three of America’s largest mortgage lenders—Bank of America, J.P. Morgan Chase, and Ally Financial., formerly GMAC mortgage. But runaway pens and flying rubber stamps may be the least of bank officials’ worries as bank regulators and law enforcement officers look deeper into the latest developments in the foreclosure fiasco. As investigators plow through box after box of foreclosure documents rushed through the legal systems in all fifty states, they continue to find evidence of gross negligence, abuse, and fraud. According to the latest reports, several attorneys general are looking at felony charges against banking officials and their attorneys.
Florida investigators have found compelling evidence that senior lawyers at the firm of David J. Sterns prepared and signed fraudulent foreclosure document, receiving lavish gifts and rewards from the companies they represented. Florida Attorney General Bill McCollum released a deposition in which the witness testified Sterns attorneys signed as many as 1000 foreclosure files per day, receiving vacations, expensive jewelry, and BMW automobiles in exchange for their so-called “hard work.”
Who owns “the note”?
The most serious criminal charges will arise from questions about “the notes” in at least 60,000 foreclosure files. The note is the simplest and by far the most important document in a mortgage package, because it pledges the property as collateral for the mortgage, and it authorizes the note-holder to take possession of the property in the event of default. In these sixty-thousand or more cases, the original note either is missing or an affidavit of its digitized existence substitutes for it. In the twenty-three states where investigators are subjecting foreclosure files to the most intense scrutiny, judges have pledged they will not approve eviction notices unless documents include the original note.
