Foreclosures & Robosigning
- Halt to foreclosures was a result of mortgage servicers' shortcuts.
- Robo-signing was an attempt to save money.
How Does Robo-signing Impact Foreclosure Processing?
There was a lot of talk about foreclosures and shortcuts taken when processing foreclosures. Though the month of October and November 2011, news reports of falsely signed documents or paperwork that should be present, but wasn’t. In all cases, however, the proper procedures were not followed. That was the problem.
One handy term that many have been using to describe this problem is "robo-signing". Any document which has been signed by an official who hasn’t read it is one that has been robo-signed. We are now finding out that in some cases officials were signing them by the hundreds or thousands per day, turning foreclosures into an assembly line for bank repossession.
What’s in it for the Robo-Signer?
Allegations of money, cars, and even vacations were reported to have been given to those who participated in the fast processing of foreclosures. While most of the particulars of these bribes will probably remain a mystery, it’s important to understand that the robo-signing problem was caused by more than a few bad signatures.
Looking to the future, it is clear that the foreclosure review was definitely needed. An unfortunate consequence of the stoppage, however, is that another back up of foreclosures is on the way. It will be interesting to see what new regulations, if any, come out of the review or if the problem will repeat itself when the halt is over. It is likely that we will have to wait until the New Year to find out.