Like everyone else, I’d been reading with amazement the stories about one of those legal problems: the robo-signing scandal that has ensnared all the banks with mortgage servicing subsidiaries, Bank of America included. That’s the scandal in which a tiny handful of employees had signed ”” or allowed others to forge their signatures ”” on thousands of affidavits confirming that the banks had the legal right to foreclose on properties they serviced. In truth, they had often never seen the documents proving the bank had that legal right. In some cases, the documents didn’t even exist. As a result of the mounting publicity, many big banks had halted all foreclosures while they reviewed the legality of their affidavits.
Mr. Moynihan said that, at Bank of America, at least, the foreclosure halt in 23 states that require judicial proceedings was over. It had reviewed some 102,000 affidavits and ”” guess what? ”” no big problem! “The teams reviewing data have not found information which was inaccurate” or that would change the plain facts of foreclosure ”” namely that the homeowners it wanted to foreclose on were in serious arrears.
Thus the bank’s central position is that, since it is so doggone obvious that the homeowners can’t pay their mortgages, the fact that the affidavits might not have complied with the law shouldn’t cause anyone to break into a sweat. At one point Mr. Noski actually said, “I think it’s a big issue because people are losing homes. It’s not a big issue” for the servicers. Glad he cleared that up.
[blockquote]”Thus the bank’s central position is that, since it is so doggone obvious that the homeowners can’t pay their mortgages, the fact that the affidavits might not have complied with the law shouldn’t cause anyone to break into a sweat.”[/blockquote]
Ok…right…the legality of proper signatures doesn’t really matter in contract law. All those things that lawyers spent years learning in law school don’t really matter because affidavits do not have to comply with the law. Oh, I can’t wait for a judge to pass that ruling. /sarc Think about it…if the banks signatures do not have to be lawful, then the purchaser’s signatures don’t matter either. Either signing a document has legal weight or it does not. If banks committing fraud with their documentation is ruled to be “legal”…then home owners could prepare quit claims on their property and fraudulently sign a bank officer’s name to them…and it would be just as legal.
1, agreed. The banks’ position doesn’t even pass the blush test. Sort of a flexible due process that’s always flexibly in favor of the bank.
Maybe someone can clear this up, but on the face of it, it doesn’t seem like the bank has any need to have a legal document saying it has the right to forclose on a house, since that is part of what a mortgage is; the bank actually owns the house and if it is not paid back in the manner agreed upon has the right to take it although it often has grace, both so house ‘owners’ can keep their house and so that the bank can recoup their money. As I said though, I might really be missing something and am interested in any insight.
No. 3, in some states that may be true, but in most there is also a process that needs to be followed. The mortgage lays out the terms of the loan for a real estate transaction and the law the process by which those terms are kept. In the situations being discussed the banks didn’t follow the process and committed fraud when their agents signed false documents to make it look like they did. As the article and other comments question, at what point can the law be disregarded and by which class of citizen?
I’m curious as to the fallout for Notaries Public as well.
I used to do bank packages for a title company. The paper work had to be in a very exact order and we were told over and over again the importance of making sure documents were properly signed and notarized. The notaries were told that if a document was an affidavit, swearing or affirming the signature was mandatory.
There were quite a few times when I caught questionable signatures (Odd how the witness and the property seller have the same signature). Plus heaven forbid if the note was not in the right place.
If I as a low totem disburser had to adhere to such a standard then those who are way higher up in the chain should too.
#3 No, the bank does not own the house. The home owner owns the house and that is why they have to pay taxes on it. The bank owns a loan that is collateralized by the house. Now, if the bank’s documents are fraudulent, then the loan, if defaulted on, may not be actionable. If they sold the loan (and the documents) and did not do the proper legal process, that is not the fault of the homeowner. If another party purchases that loan and fails to do due dilligence and verify the legality of the loan documents, then again, that is not the problem of the home owner. Think of it this way…
If you buy something and then decide to return it, many (if not most) stores will insist that you have a valid receipt in order to get a refund. No receipt, no refund. This is similar. The bank is demanding payment…so, ok…they have to show the receipt that says they are entitled to that payment. It has to be a legal receipt. No fraudulent signatures are acceptible.
And, in most of these cases they even seem to have lost the note. That is, they can’t prove, except maybe by course of dealing, that a loan was actually made, nor can they prove that they are even entitled to receive the payments. I can see the eventual need to bring quiet title actions to determine who has title and render the property marketable once more.
Banks are the enemy. It never ceases to amaze me how many people sit down to play cards with the devil, and then express shock when discovering he cheats.