Banks Mostly Ignoring Robo-Signing Problems
The country’s largest lender has already completed its review of over 102,000 foreclosure filings and claims to have found no evidence of wrongdoing whatsoever, having only checked for any owners that were not actually under default. This is a very mixed message however, since the real problem raised by the robo-signers is whether or not the lenders actually own the note and therefore have the right to foreclose. The depositions of several robo-signers have helped some individuals facing foreclosure but has not prompted the lenders, or the state or federal governments, to remedy these due process problems or bring anyone up on criminal charges. Federal Reserve Chairman Ben Bernanke also promised to thoroughly review foreclosure processes with the lenders without offering any specifics.
However these foreclosures now require judicial review before than can be re-filed, and there are reports that many judges are much more wary this time around. The New York Daily News reported on many cases being tossed out on review for having fake documents and back-dated forms. New York now requires foreclosure attorneys to vouch for the authenticity of the paperwork they submit.
Law blogger Matthew Weidner describes Bank of America’s review as “a statement so absurd it defies commentary…Apparently all my clients and every Realtor who will tell you that Bank of America is the absolute worst to deal with are totally wrong.” Despite the dismissive response by the lenders to the “robo-signing” scandal as well as claims for buybacks from investors, class-action lawsuits, and federal investigations, the new “foreclosuregate” is likely to continue well past November elections as connections between the troubled economy and problems in the mortgage industry are clearly excarberating the crisis of the last few years.
The first few months of state-mandated mediation programs have varied from state to state and county to county, but in some situations have completely out-stripped the success rates of previous government initiatives such as the HAMP program. In some situations in Nevada, there have been complaints of lenders showing up unprepared or refusing to negotiate reasonable terms, which have resulted in renewed requests for judicial review by the borrower. Some attorneys have been frustrated by their inability to question the authenticity of documents that the lenders provide in mediation. Due to the differences in how mediation is handled, however, there are stand-out cases elsewhere that have really made a difference. The mediation program in Cuyahoga County, Ohio, which has been around longer than most, boasts an agreement rate of nearly 75%, with over 3800 settlements reached for homeowners.
Recently Florida’s mediation program came into action, providing a setting where lenders & homeowners can expedite a resolution. Mediations often cut through the months of mis-communication and review that are notorious for loan modifications.The official mediation administrator for the program is the American Arbitration Association, an organization that specializes in conflict management and dispute resolution services. All Florida homeowners have the right to mediation with their lenders that they must enter into or waive before foreclosures can proceed. Borrowers need to have an attorney present for mediation to make sure these rights are respected – our firm will do everything possible to support those mediations - contact us for a free consultation!