NEW YORK (AP) – Sept. 2, 2011 – Counties across the United States are discovering that illegal or questionable mortgage paperwork is far more widespread than thought, tainting the deeds of tens of thousands of homes dating to the late 1990s.
The suspect documents could create legal trouble for homeowners for years.
Already, mortgage papers are being invalidated by courts, insurers are hesitant to write policies, and judges are blocking banks from foreclosing on homes. The findings by various county registers of deeds have also hindered a settlement between the 50 state attorneys general who are investigating big banks and other mortgage lenders over controversial mortgage practices.
The problem of shoddy mortgage paperwork, which comprises several shortcuts known collectively as “robo-signing,” led the nation’s largest banks, including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., and other lenders to temporarily halt foreclosures nationwide last fall.
At the time, “robo-signing” was thought to be contained to the affidavits that banks file when a mortgage is issued and somebody buys a house. The documents are used to prove they have the right to foreclose if the homeowner isn’t making mortgage payments. Companies that process mortgages said they were so overwhelmed with paperwork that they cut corners.
But now, as county officials review years’ worth of mortgage paperwork, in some cases combing through one page at a time, they are finding suspect signatures – either signed with the same name by dozens of different people, improperly notarized or signed without a review of the facts in the paperwork – on all sorts of mortgage documents, dating as far back as 1998, The Associated Press has found.