With our nation still facing over 2.9 million foreclosures, many of which have been put on hold because of document irregularities like the robo-signing controversy, the likelihood of more bankruptcies is increasing. Home foreclosure is one of the leading causes for bankruptcy filings.
The term Robo-signer was recently coined by attorney Matthew Weidner of Florida. According to the Wall Street Journal Article titled, Niche Lawyers Spawned Housing Fracas, published on October 21, 2010, the potentially fraudulent practice of robo-signing was first identified and reported in a 1999 white paper by Nye Lavalle titled 21st Century Loan Sharks.
According to a Wikipedia, “Robo-signing is a term used by consumer advocates to describe the robotic process of the mass production of false and forged execution of mortgage assignments, satisfactions, affidavits and other legal documents related to mortgage foreclosures and legal matters being created by persons without knowledge of the facts being attested to. It also includes accusations of notary fraud wherein the notaries pre and/or post notarize the affidavits and signatures of so-called robo-signers.”
America is just beginning to learn of the depths of robo-signing and what consequences the practice is having on our current housing crisis. Cases challenging the practice of robo-signing are now being challenged all over the nation in both bankruptcy and civil courts.
Bankruptcy Judge Diane Weiss Sigmund recently found in one of her bankruptcy cases a reason to render a decision based on robo-signing. In re Taylor, the judge determined a proof of claim had been robo-signed by a Lender Processing Services, Inc. (LPS) employee. LPS was acting as an intermediary between the mortgage company and the company’s law firm. As a result, erroneous documents were provided to the bankruptcy court and improperly signed. These facts caused the judge to eventually sanction the mortgage company, its law firms, and LPS for improprieties, and the group lost the petition to remove the automatic stay.
The mild scolding sanction given by the judge to the plaintiffs to do better in the future did not match what could have been done by the judge under violations of Rule 9011 of the Bankruptcy Code. The judge, despite what appeared to be fraudulent activity, could not find the plaintiffs acted with “objective unreasonableness conduct.”
In one recent civil case that came under the jurisdiction of the Kings County, New York, Supreme Court Justice Arthur M. Schack, robo-signing was at the center of of the case. In HSBC Bank USA vs Ellen N. Taher, plaintiff HSBC was found to lack standing to commence with a foreclosure action, and the case was dismissed without prejudice.
Judge Schack chastised the plaintiff’s lead counsel in the case for presenting robo-signed documents to the court while affirming “under the penalties of perjury,” to the best of the lawyer’s “knowledge, information, and belief, the Summons and Complaint, and other papers filed or submitted to the Court in this matter contain no false statements of fact of law.” When examined closer by the judge, the lawyer admitted the documents had been affirmed by a known robo-signer working for an independent company.
All of these cases which have been revealed to the public are beginning to raise questions in the public’s mind. One of these questions is whether or not robo-signers should be prosecuted for committing fraud.
Why shouldn’t we demand from the lenders what they demand from the borrowers? Borrowers must cross every tittle and dot every “i” when going through the closing process to purchase a home. The mortgage companies leave little legal room for errors. The cost mostly falls on the homeowner or seller, and the mortgage company’s extract exorbitant fees. All the while, many home buyers can barely afford the closing costs, let alone a lawyer to read every line of the documents.
Another question raised is who really owns your loan contract? Banks, through robo-signing techniques, are selling the loan contract to other companies with whom you have no contractual relationship.
Robo-signing is fraud, pure and simple. If you were to commit bankruptcy fraud or fraud against a creditor, don’t think for a minute you would not be prosecuted. Why do creditors get off with a slap on the wrist when they perpetrate fraud on debtors?
Maybe you are victim of robo-signing and you are facing foreclosure. If the foreclosure has forced you into bankruptcy, you may need a bankruptcy lawyer who can answer your bankruptcy questions. If live in or around the metropolitan areas of Austin or San Marcus, Texas, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area.
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