There has been a furor the last two weeks regarding the robo-signer scandal. Dean Hartman, a guest blogger and friend, made the case that a moratorium makes no sense and would do more harm than good. Others have made the opposite argument. The KCM Crew has posted on possible ramifications and a possible silver lining to the freeze on foreclosure procedures.
Today, I want to take a step back and look at the issues that will not allow this mess to just fade away. To my knowledge, there has only been one homeowner who paid his mortgage in a timely manner but was foreclosed on anyway (and that was a computer glitch that had nothing to do with the current challenges). As far as I can decipher, there may not be one family that was evicted from their home without reason. The banks may have just been sloppy with their paperwork. And, they are reviewing hundreds of thousands of files as we speak. However, being careless in their procedures might be enough of a reason to force banks to call a freeze.
Even accused criminals are presumed innocent until proven guilty in this country. Every day in courts throughout the land people are set free on legal technicalities. We, as a country, believe protecting the rights of individuals is a tenant of our freedom. Why should this not apply to homeowners?
If a bank has a right to foreclose on a property, fine. But, shouldn’t they need to prove that right, especially in the states where it is a legal requirement? It is not as though the banks are beyond blame in this matter.
The Washington Post this weekend ran an article which explained:
The financial incentives show that the problems plaguing the foreclosure process extend well beyond a few, low-ranking document processors who forged documents or failed to review foreclosure files even as they signed off on them. In fact, virtually everyone involved – loan servicers, law firms, document processing companies and others – made more money as they evicted more borrowers from their homes, creating a system that was vulnerable to error and difficult for homeowners to challenge.
And The Wall Street Journalreported on two different employees who admitted to signing off on files they didn’t review:
In a deposition for a lawsuit in Palm Beach County, Fla., an employee … said that she signed “hundreds” of foreclosure affidavits a day without verifying the documents’ information, as her signature would imply that she had …
Xee Moua, an employee who processed documents at a office in Fort Mill, S.C., said she signed as many as 500 foreclosure affidavits a day without verifying information on the documents, apart from her name and title.
“Do you verify any of the numbers that may be on some of these documents?” a lawyer asked her in the deposition.
“I do not,” Ms. Moua said. “That’s not part of my job.”
The attorney also asked: “You’re swearing that everything in it is accurate, correct?” Ms. Moua replied: “Yes sir.”
She said her job description is to “oversee that these documents are executed and returned in a timely manner to our attorneys.”
And, both of these employees worked for Wells Fargo who has yet to suspend foreclosure actions!
There are always two sides to any situation – including this one. As always, we will try to keep you informed on how you and your family may be impacted as this situation develops.
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