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Mortgage Robo Signing | Government Lawsuit Against Banks

Mortgage Robo Signing

In 2010, it came as a terrible shock to learn that financial lenders, such as bank giants JP Morgan Chase, Bank of America and Wells Fargo, were submitting falsified, unverified or otherwise fraudulent foreclosure paperwork in court. Banks were routinely using affidavits signed by employees who either didn’t review the documentation as required or had no basis for believing if the borrower was in default. These banks became machines for processing illegal affidavits. Quantity won over quality, as bank employees began “robo-signing” documents, processing thousands of affidavits a month.

Robo Signing Foreclosures

As a result of robo-signing, borrowers suffered, many losing their homes due to wrongful foreclosure papers submitted by lenders in court. Affidavits falsely inflated the degree of default that homeowners were in and wrongly claimed missed mortgage payments. Homeowners’ hands were tied, and thousands of foreclosed properties were wrongfully processed in court.

Government Lawsuit Against Banks

Fortunately, the government finally cracked down on robo-signing year. A $26 billion settlement with banks was reached, relieving struggling borrowers and providing them with a significant reduction in mortgage payments. For previous homeowners who lost their homes to foreclosure, banks are giving them a small concession payment (nothing that’s commensurate will losing one’s home, however). Additionally, the banks have agreed to abolish the practice of robo-signing in place of legal and judicious processing of all foreclosure paperwork from now on.

Robo Signing Mortgage Attorney

If you are faced with foreclosure or dealing with mortgage litigation issues, then call us at McFarlin LLP. It’s important to understand your rights and have an attorney working for you to keep lenders honest. The propagation of illegal affidavits means that more homeowners should be able to contest foreclosure in court. For this reason, an attorney who is experienced in mortgage litigation can leverage this homeowner advantage, negotiate with banks and keep you in your home for as long as possible.