Florida names connected to last fall's mortgage "robo-signing'' scandal are turning up on documents again.
County officials in at least three states say they have received thousands of mortgage documents with questionable signatures in the past eight months. Lenders say they are working with regulators to fix the problem but cannot explain why the practice, which led to a nationwide halt of home foreclosures, has continued.
"Robo-signing is not even close to over," says Curtis Hertel, the recorder of deeds in Ingham County, Mich. "It's still an epidemic."
In Guilford County, N.C., the office that records deeds says it received 456 documents with suspect signatures from Oct. 1, 2010, through June 30. The documents, mortgage assignments and certificates of satisfaction, transfer loans from one bank to another or certify a loan has been paid off.
Suspect signatures on the paperwork include 290 signed by Bryan Bly and 155 by Crystal Moore. Last fall, Bly and Moore worked for Nationwide Title Clearing, a Pinellas County company, when video depositions they gave in a foreclosure case popped up on YouTube and AOL. In one deposition, Moore was asked if she ever read any of the documents she signed. She replied, "No.'' Asked how much time she spent with each document, she said, "a few seconds.'' When Bly was asked in the deposition what a mortgage assignment is, he replied: "I'm really not sure."
At the time, both admitted signing their names to mortgage documents without having read them. Neither was charged with a crime. The Palm Harbor company said in a statement at the time that it follows court-approved industry practices and that it was "unethical'' to suggest that preparing common, mortgage-related documents is "somehow harmful for consumers.'' No one could be reached at the company Monday night.
In Michigan, a fraud investigator says he has uncovered documents filed this year bearing the purported signature of Marshall Isaacs, a lawyer with foreclosure law firm Orlans Associates. Isaacs' name did not come up in last year's investigations, but county officials across Michigan believe his name is being robo-signed.
In Essex County, Mass., the office that handles property deeds has received almost 1,300 documents since October with the signature of "Linda Green," but in different handwriting styles and with many different titles.
Linda Green worked for a company called DocX that processed mortgage paperwork and was shut down in the spring of 2010. County officials say they believe Green hasn't worked in the industry since. Why her signature remains in use is not clear.
"My office is a crime scene," says John O'Brien, the registrar of deeds in Essex County, which is north of Boston and includes the city of Salem.
The 14 biggest U.S. banks reached a settlement with federal regulators in April in which they promised to clean up their mistakes and pay restitution to homeowners who had been wrongly foreclosed upon. The full amount of the settlement has not been determined. But it will not involve independent mortgage processing firms, the companies that some banks use to handle and file paperwork for mortgages.
So far, no individuals, lenders or paperwork processors have been charged with a crime over the robo-signed signatures found on documents last year. Critics such as April Charney, a Florida homeowner and defense lawyer, called the settlement a farce because no real punishment was meted out, making it easy for lenders and mortgage processors to continue the practice of robo-signing.
Much of the new suspect paperwork is for refinancing or for new purchases by people who are in good standing in the eyes of the bank. In addition, foreclosures are down 30 percent this year from last. Home sales have also fallen. So the new suspect documents come when less paperwork is streaming through the nation's mortgage machinery.
None of the almost 1,300 suspect Linda Green-signed documents from O'Brien's office, for example, involve foreclosures. And Jeff Thigpen, the register of deeds in North Carolina's Guilford County, says fewer than 40 of the 456 suspect documents filed to his office since October involved foreclosures.
The county officials say the problem could be worse than they're reporting because they are working off lists of known robo-signed names, such as Linda Green and Crystal Moore, that were identified during the investigation that began last fall. They suspect other names on documents they have received since then are also robo-signed.
In June, the Michigan attorney general issued criminal subpoenas to several firms that process mortgages for banks, including Lender Processing Services, the parent company of DocX, where Linda Green worked. On July 6, the CEO of that Jacksonville company, Jeffrey S. Carbiener, resigned, citing health reasons. The company is also under investigation by the Florida Attorney General's Office.
At worst, legal experts say, the document debacle has opened the property system to legal liability well beyond the nation's foreclosure crisis. So someone buying a home and trying to obtain title insurance might be delayed or denied if robo-signed documents turn up in the property's history. Forged signatures call into question who owns mortgages and the properties they are attached to.
"The banks have completely screwed up property records," says L. Randall Wray, an economics professor and senior scholar at the University of Missouri-Kansas City.
Information from the Associated Press and Times files was used in this report.