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A Times Editorial

Ferreting out mortgage fraud

Attorney General Pam Bondi wisely intends to continue the work started by her predecessor to investigate foreclosure malpractice in Florida. Banks, loan servicers and their law firms like to complain that the reason for all the faulty paperwork in foreclosure cases is due to the high volume of cases. In fact, corners often were purposely cut to speed foreclosures through the courts as cheaply and quickly as possible. The result has been widespread deception visited upon Florida courts. Documents were signed with fraudulent signatures; obviously false notarizations were made; and documents were fabricated, including questionable mortgage assignments. And the more the Attorney General's Office digs, the more dirt it finds.

In a recent presentation titled "Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases," the Attorney General's Office detailed how foreclosure paperwork was churned out using robo-signers who vouched for the accuracy of mortgage documents without a clue about what they were signing. In one case, the name Linda Green appears on hundreds of thousands of mortgage assignments, and she is listed as an officer of dozens of banks and mortgage companies. But Green's signature is so different on various documents that it's clear multiple people were signing her name.

Forged mortgage assignments that transfer ownership of mortgages from one bank or investor to another raise the prospect that the entity foreclosing may not have the legal right to do so. In fact, there have been cases in Florida where a bank attempted to foreclose on a homeowner while it didn't hold the note, as well as attempts to foreclose on homes that have been fully paid off.

Having had enough of the lies and deception, the Florida Supreme Court now requires that mortgage foreclosure filings involving homes include a statement that attests to the truth of the claims. The purpose, as noted by the court, is to push the bank or loan servicer to actually do the work necessary to verify its right to foreclose, and to give the courts greater authority to sanction anyone who files a fraudulent document.

Attorneys representing the lenders also should be held responsible for any fraud. They like to point the finger at their clients, but lawyers as officers of the court have a responsibility to police the documents they file, particularly when a client is known to have used robo-signers in the past.

Bondi's office is investigating four law firms that specialize in representing banks and loan servicers in foreclosure actions, two companies that serve homeowners with court summonses, and a servicer that allegedly produces thousands of mortgage assignments every day. The financial sector and its legal representatives have been playing fast and loose with the procedures designed to protect the integrity of the foreclosure process. They should face serious consequences for this intentional lapse.

Ferreting out mortgage fraud 01/16/11 [Last modified: Sunday, January 16, 2011 3:30am]

    

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