Banks Still Fabricating Docs, Commiting Foreclosure Fraud

09-03-2011 • Ritholtz.com

s hard as it may seem to believe, the largest mortgage servicers are still fabricating documents for use in foreclosures. That’s according to an article in American Banker, titled Robo-Signing Redux: Servicers Still Fabricating Foreclosure Documents. Key points: • The practice continues a year after the companies were caught in the robo-signing scandal, even as the industry has been negotiating a settlement with state attorneys general re: 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. • Some of documents reviewed by American Banker included signatures by current bank employees claiming to represent lenders that no longer exist. • North Carolina consumer bankruptcy lawyer O. Max Gardner III says servicers and trustees often submit promissory notes in court without proper endorsements, which show the chain of title from one lender to another. Then, after the fact, there will be “a magically appearing note with a stamped endorsement,” Gardner said.