Robo-Signing and fraudulent record keeping, initially disclosed in the fall of 2010, continues to take its toll on innocent homeowners- ruining their credit, sending their homes into foreclosure and creating undue stress.
When “Robo-Signing” first surfaced, it was thought to be contained to paperwork that banks used to prove they had the right to foreclosure on a home. However, it appears that the illegal or dubious practices are much more prevalent than originally thought. Phantom Mortgages - loans that borrowers thought were paid off - seem to be resurging and are being used to force homeowner into foreclosure. More and more cases are coming to light where people who don't owe the bank anything are getting ensnared in the same foreclosure nightmare as those who have missed payments.
According to Diane Thompson, an attorney with the National Consumer Law Center, she says "The record-keeping on the part of the mortgage servicers is not to be trusted." She has defended hundreds of foreclosure, and in most of them, the homeowner was not in default. Unfortunately, homeowners may be plagued for years with legal issues arising from these controversial lending practices.
A case in point is Shantell Curtis of Utah. Bank of America foreclosed on loan on a home that she had sold years before and paid off the mortgage. Under closer inspection, it appears that the foreclosure event stemmed from a bank coding error that falsely accused Curtis of owing $1 on her mortgage.
A Bank of America spokesperson, said the bank reviewed their foreclosure procedures in the fall of 2010 and are in the process of implementing those improvements. Apparently Curtis’ situation occurred before the bank identified the faulty areas.
The phantom or reincarnating mortgage may be only the latest development in the banks' mortgage signing calamity. It remains to be seen what other situations will arise from the scandal. An escalating number of lawsuits and investigations against the mega banks continue to stockpile. A number of U.S. attorneys generals are pushing for a quick settlement. The situation will probably continue to transpire as individual Attorney Generals launch their own investigations.
Andee Allen is freelance writer, Real Estate Investor, Business Consultant, and California Realtor (License #01854926). You are welcome to contact Andee at andeeallen@gmail.com or on her website http://www.andeeallen.com
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