Is Obama's Plan to Replace Fannie and Freddie Feasible?

Is Obama's Plan to Replace Fannie and Freddie Feasible?

Should Lenders Be Allowed to Robo Sign?

For those who don't know, robo signing is a recently uncovered practice in the mortgage servicing industry during foreclosures and bankruptcies.

Here's what happens:  an employee of the company wishing to foreclose on a particular piece of real property is tasked with signing affidavits to be attached to documents to be submitted to various courts. 

Here's the problem:  the employee is given so many documents to sign it would take forever to review and verify the contents of each document.

And here is what robo signing is: the employee, under pressure to produce, just verifies that the correct party names are on the document (perhaps checks the amount due against a computer screen, or the name of the court, case no...other incidentals)  and after spending a couple minutes with the document, signs it, puts it into a pile and goes on to the next document.  And the next, and the next.


Of course the affidavit says that he has verified the contents thereof, and it is all true and correct, but don't worry about that.  We got a lot done. Right?

Oh yes, one more thing.  The affidavit has to have a notarized signature. So off the entire pile goes to have another person notarize them.  Not in their presence as it says, perhaps not on the same day, or even in the same building (or even in the same state) but it gets notarized. [I believe sometimes the notarization comes first, but can't prove that right now.]

In any event, the mortgage companies, the servicing agents, the trustees for the securitized trusts all agree they should be allowed to robo sign, or at the very minimum, have the robo signed documents replaced with new ones that someone now verifies.

So the question is - should robo signing be allowed?  After all, everyone from White House advisers to mortgage industry spokesmen say that it would HURT the housing industry to slow down foreclosures in this country.  So what is the big deal if a person didn't verify every detail of each document they signed?

First and foremost, they lied to the court.  And that is a huge big deal to me.  If you  are allowed to lie to the courts, the entire system breaks down.

Isn't that reason enough to make sure that those who are swearing to the court that they verified the issues contained in a document actually did so?

So I say TELL THE TRUTH. If you are going to swear to the court under penalty of perjury that you did in fact do something, be sure you did in fact do that thing first.

Is that so hard?

Where is the love[hate] for mortgage companies?

I am amazed at the lack of outrage at the alleged problems in the mortgage industry.  Or am I just missing it?


It seems like the mortgage industry may be going to sail through and come out the other side of this storm with very little to show in the way of change. The foreclosure and bankruptcy procedures followed (allegedly) by the mortgage companies include forcing lawyers to speed through their filings with little or no time to review anything; insisting on such speed that many law firms are using paralegals or secretarial help to create documents; having people creating assignments to cover the requirements of courts months or years after the fact; creating assignments to back up their allegations in pleadings; creating assignments that don't ever get attached to the original mortgage; not even having the original mortgage and/or note; having employees sign affidavits at the rate of one ever 2 or 3 minutes - with no time to confirm the contents; having affidavits notarized at another time and/or location from when/where they are signed....and on and on.

You would think this would cause an outcry among the attorneys practicing in the fields affected if not among the general public, but there is no real outcry that I am aware of.  Oh sure, there are some out there that are posting every news article on the subject on facebook, twitter and linkedin (myself included), but the responses are few and far between.

The government regulators are absent.  They even suggest that slowing down foreclosures might be a bad thing.  Of course this is the same government that has been giving these major mortgage companies lots of our tax money, but hey - they are impartial, right?

So am I just missing something?  I'd sure like to hear from those of you that are being affected by these issues.

Sitting and thinking

It is another cold day in Oklahoma (started out with a record cold below zero temperature), and there is still plenty of snow outside. This gives one lots of time to sit and think. And there is plenty to think about. Unemployment is still high, the housing market is still in crisis, and if our problems aren't enough there is Egypt to ponder.

All that I have learned, all that I have experienced, and all that I have read makes me think that the banking/mortgage/housing crisis hasn't even begun to resolve itself. The whole mess is like an ice berg.  We saw the banks being bailed out as housing markets crashed, prices dropped. We watched the news as "robo-signing" came to light (another blog to come). And now there are those who say we may yet have a worse crisis than we believed.

 All this because apparently someone somewhere had the bright idea that they could skip steps in the process of transferring mortgages from one service/lender/investor to another. And many of the companies who skipped steps are trying to sweep the whole thing under the rug. After all, it was so common in practice that everyone did it, then it must be okay, right?

I'm all about doing what is best for everyone involved when I'm practicing law, however ONLY when it is done above board and legally. You can't skip all the necessary steps and expect to be excused.

I'll have plenty to say about this in blogs to come. For now, like Pooh, I have to say, "sometimes I sits and thinks, and sometimes I just sits."