Robosigners

Robosigners

‘Robosigners’ have been accused of rubberstamping foreclosure documents too quickly.

Who are these ‘robosigners’?

The staff used by US banks to sign off on foreclosures have been dubbed “robosigners” for the speed with which they rubber-stamped mortgage documents without checking their accuracy. They have also been called fast food walk-in hires who barely knew what a mortgage was. Tens of thousands of American families have been evicted in this way.

How do we know this is happening?

Several bank employees have made statements in court. For example, GMAC manager Jeffrey Stephan said he had signed off on legal documents for 10,000 foreclosure papers a month without verifying them. Threatened with legal action, many of the banks, with the notable exception of Wells Fargo, have halted foreclosures on delinquent borrowers to review their procedures.

Can the banks get away with using robosigners?

JP Morgan’s chief executive, Jamie Dimon, said on Wednesday that banks could get fined for their foreclosure practices, the first top banking executive to make such comments. Attorney Generals in 50 American states have begun a joint investigation and some homeowners have also taken legal action.

Which banks are embroiled in the ‘robosigner‘ scandal?

Banks embroiled in the scandal include Wells Fargo, GMAC, OneWest Bank and JP Morgan. JP Morgan has more loans, in value, in foreclosure than any other bank in the US and is reviewing its approach to the 115,000 home loans across 41 states. GMAC halted foreclosure evictions in 23 states last month.

Fannie Mae and Freddie Mac are reviewing foreclosures on GMAC-serviced mortgages they own and have halted evictions on them until the review has been completed.

The situation is not the same in all US states.

In judicial foreclosure states, mortgage servicers must file a motion in court to take possession of a home in a foreclosure. They have to demonstrate that they have reviewed the supporting documents, checked who owns the mortgage note and had a ‘notary public’ witness their signature. However, in some states (non-judicial foreclosure states) are carried out without any judicial supervision and can be completed in two months. In other states, a foreclosure can take a year and a half.

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