False Affidavits in Foreclosures: What the Robo-Signing Mess Means to You!
The robo-signing scandal is an opportunity for homeowners to challenge foreclosures in court, negotiate with lenders, and buy time. The recent foreclosure crisis has created a massive amount of corruption and out right fraud in America's banking industry. The number of foreclosures in America that are based on fraud is impossible to know for sure, but it is clearly in the millions. The recent attorney general settlement barely scrapes the surface of the massive and pervasive fraud which now drives most of Florida's mortgage foreclosure lawsuits. Indeed the fraud has even begun to decay the foundation of our courts. Is Fraud involved in your foreclosure lawsuit; if its from one of America larger banks its a distinct possibility.
Read on to learn about the massive robo-signing problem and what it means for homeowners.
Recently the media and courts have slammed the mortgage lending industry for using false affidavits in thousands of foreclosure cases. Because of the "robo-signing" scandal, several large banks have temporarily frozen all pending foreclosures. For some homeowners, the robo-signing mess may create opportunities to challenge their foreclosure in court or negotiate with lenders to avoid foreclosure.
What Is Robo-Signing?
As part of the foreclosure process in the 25 or so states that require judicial foreclosure, which includes Florida, (the lender must go to court), the lender must demonstrate that the homeowner has defaulted on a mortgage and that the lender owns the mortgage.
Typically, in a judicial foreclosure state, the lender proves the requisite facts by submitting documents and a written statement signed under oath (called an affidavit) by a person (usually a bank employee) who has reviewed the documents and who is supposed to have some personal basis for believing the facts to be true. The idea is to prevent foreclosures on homes where the foreclosing bank cannot prove that it actually owns the mortgage (which is more common than you might think) or where the homeowner is not actually in default to the degree asserted in the foreclosure papers.
It has now become common knowledge that several large banks have routinely used affidavits signed by employees who have not personally reviewed the documents and have no basis for believing that the homeowner is in default or that the bank owns the loan. Employees for financial giants like Bank of America, JP Morgan Chase, Wells Fargo, and GMAC have all testified that they signed many thousands of affidavits a month, spending about 30 seconds on each affidavit, and that they didn't have a clue regarding the veracity of the affidavit or the documents in question -- hence the name "robo-signers."
In other words, these bank employees have proven what many of us have known all along. These banks have LIED in order to take the homes of Americans; they have turned against their customers, laughed at our laws, and rolled over our court system and judges.
What Effect Does a False Affidavit Have on the Foreclosure Process?
Banks cannot legally foreclose on a house if the foreclosure paperwork is not in order. This means that if the affidavit a bank submits is false -- as any affidavit completed by a robo-signer would be -- the foreclosure should not go through. Of course, the reality is that banks have foreclosed on thousands of properties based on just such false affidavits. But now that the issue has come to light, business is not always as usual. Here's what's happening:
- In states where foreclosure must go through the court system, more and more judges are taking a closer look at the affidavits and paperwork and refusing to sign off on the foreclosure.
- In states where foreclosure does not go through court, some homeowners are bringing lawsuits to stop the foreclosure on the ground that false affidavits have been recorded as part of the non-judicial foreclosure process.