Real Estate & Property Law

Foreclosure System Is ‘Riddled with Faked Documents’

  • Print

Revelations that an Ally Financial “robo-signer” employee routinely failed to review the lender’s foreclosures for accuracy may be just the tip of the iceberg.

The admissions by the employee, charged with reviewing 10,000 cases a month, could have an impact beyond the 23 states where Ally has halted foreclosures, the Washington Post reported yesterday. Today the Washington Post reports that Ally isn’t the only lender whose employees failed to review foreclosure information before taking legal action.

According to the newspaper, “The nation’s overburdened foreclosure system is riddled with faked documents, forged signatures and lenders who take shortcuts reviewing borrower’s files, according to court documents and interviews with attorneys, housing advocates and company officials.”

Other lenders whose work is at issue include:

• JPMorgan Chase. One of its employees said in a May deposition that she signed off on thousands of foreclosures a month without verifying the accuracy.

• An employee of a document lending company owned by Lender Processing Services claimed to be an executive with several large banks, including Bank of America and Wells Fargo, when signing foreclosure affidavits. In one case she listed “bogus assignee” as the owner of a mortgage, and in another she signed as an officer of a fake company called “Bad Bene.” (The company says the names were just “placeholder phrasing.”)

Ally, formerly known as GMAC Mortgage Co., was used by Fannie Mae and Freddie Mac to service its loans.

Related coverage:

Washington Post: ” ‘Robo-signer’ played quiet role in huge number of foreclosures”

Washington Post: “Amid mountain of paperwork, shortcuts and forgeries mar foreclosure process”

Give us feedback, share a story tip or update, or report an error.