Supreme Court Directive

Posted by kevin on February 28, 2011 under Foreclosure Blog | Comments are off for this article

In December, 2010, the Chief Justice issued a directive concerning the “robo-signing” issue.  Submission were to be made by the major banks and by a court appointed representative for the public at large.  The return date of an Order to Show Cause was scheduled for early February.  It was put off until March 1 and now is off until March 29, 2011.

There is speculation that the delay has been caused by negotiations between the court appointed advocate and the banks dealing with procedures to be implemented to “insure” that the system is operating within the Rules of Court.

At direct issue is robo-signing.  In basic terms, this means that the lenders assigned specific employees to sign documents- usually many documents per day.  The employee was not involved in the preparation of the documents and did not know anything about the underlying facts set forth in the documents.  Many times, stacks of signed documents were then sent to a notary who would notarize the document for filing or submission to the court.  The problem with that is that the document is supposed to be signed in the presence of the notary.

Although this form of robo-signing is wrong and has a negative impact on the system, I believe that it pales in comparison to the allegations (by borrowers and lenders representatives) that companies are being retained by lenders to re-create documents and endorsements on notes.  The allegations are that the lenders do not have original documents so they are digitally re-creating them.  Such an allegation was made by a VP of a major bank and her deposition testimony is on the internet.  This is scary stuff.

Some may say that this is no big deal.  The bottomline is that the homeowner borrowed the money and did not pay it back.  However, what is at stake here is the integrity of the judicial system.  If you can lie and make up documents in a foreclosure case, why can’t you lie and make up evidence in a murder trial.  We all know the defendant is guilty so what’s the problem.  That is a slippery slope that I do not want to descend.

I will keep you up to date on this important issue