FORECLOSURE SELF-DEFENSE COMPLETE GUIDE TO ROBO-SIGNERS
What is a robo-signer?
Robo-signers are mortgage lending company employees who prepared and signed off onforeclosures without reviewing them, as the law requires. Jeffrey Stephan, the GMACemployee who was the first identified as a robo-signer, has acknowledged in sworn depositionthat he prepared 400 such foreclosures a day.The discovery of robo-signers could simply bethe tip of the iceberg. If so, more revelations could only increase the pressure on large banks.Their potential exposure to losses could skyrocket.
What·s the significance?
The "robo-signing of affidavits and Assignments of Mortgage and all other mortgageforeclosure documents served to cover up the fact that loan servicers cannot demonstrate thefacts required to conduct a lawful foreclosure.If it turns out that robo-signers did indeed signoff on loans without review, they committed
by claiming knowledge of a financialmatter of which they had no personal knowledge. It could also mean that some people arewrongly being evicted from their houses.From underwriting fraudulent mortgages; to shuffling it through themortgagesecuritizationchain without following proper legal procedures like the simple act of passingalong paperwork; to concealing or doctoring basic facts when securitizing the mortgages andselling them to investors,large lenders and their partners on Wall Streetcould face hundredsof billions of dollars in losses by being forced to buy back faulty mortgages, some of whichhave already defaulted, frommisled investors.Investors bought mortgage-linked securitieswith the promise that the underlying mortgagesconformed to basic underwriting standards, and that proper procedures were followed in thechain of securitization and a tax-exempt status. Steep losses on those investments and thediscovery of potentially fraudulent activity are pushing investors to force banks to buy themback.With all of the press robo-signing has gotten, it is a bit surprising that everyone is having sucha hard time concluding whether these practices effect non-judicial foreclosures.The topic has not gotten the treatment it deserves, I will try to help. The following are by nomeans a complete list, but are the most clear LEGAL reasons (setting aside pure moralquestions and the U.S. Constitution) that the Robo-Signer Controversy will entitle hundreds ofthousands of homeowners wrongfully foreclosed and evicted to sue in non-judicial foreclosurestates.
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