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2010 Robo-Signing Article, but still relevant in 2013

2010 Robo-Signing Article, but still relevant in 2013

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Published by 83jjmack



Nationwide Title employs a computer system that automatically inserts a copy of Bly’s signature on thousands of digital files that he never sees. The system even affixes an electronic notary seal.



But in some cases, such as New Century Mortgage and Home123 Corporation, they used their own California notaries who were told NOT to make entries into their California notary journal logs, which does not comport with California notary laws.



Nationwide Title employs a computer system that automatically inserts a copy of Bly’s signature on thousands of digital files that he never sees. The system even affixes an electronic notary seal.



But in some cases, such as New Century Mortgage and Home123 Corporation, they used their own California notaries who were told NOT to make entries into their California notary journal logs, which does not comport with California notary laws.

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categoriesBusiness/Law, Finance
Published by: 83jjmack on Jan 04, 2013
Copyright:Attribution Non-commercial

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09/17/2013

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No Breaks for Robo-signing Computer Stamping Mortgage DocumentsBy Prashant GopalNovember 15, 2010 3:30 PM ESTBryan Bly is a pen-wielding “robo- signer” at Nationwide Title Clearing Inc., inking his name onan average 5,000 mortgage documents a day for companies such as Citigroup Inc. and JPMorganChase & Co.Those are just the ones that cross his desk.Nationwide Title employs a computer system that automatically inserts a copy of Bly’s signatureon thousands of digital files that he never sees. The system even affixes an electronic notary seal.“The problem with the way these documents are created isn’t because a computer is used,” saidGloria Einstein, a legal aid attorney in Green Cove Springs, Florida, who deposed Bly in a casein which her client faces foreclosure by a unit of Deutsche Bank AG. “It’s because an enterprisehas decided to use a computer to create a system where nobody is responsible for the informationand the decisions.”The rush to securitize more than $4 trillion of mortgages as U.S. home sales peaked in 2005 and2006 inundated loan servicers and contractors like Palm Harbor, Florida-based Nationwide Titlethat help them handle paperwork. Lawsuits fighting some of the more than 4 millionforeclosures since then have exposed sloppy recordkeeping and raised questions about the validity of documents used to seize properties.Signatures Draw ScrutinyBly is just one of more than a dozen robo-signers deposed in the past two years by lawyers forborrowers seeking to block foreclosures. Spurred by descriptions in depositions of employeessigning thousands of affidavits a week without checking their accuracy as legally required, theattorneys general in all 50 states last month opened an investigation into whether banks and loanservicers used faulty documents or improper practices to foreclose.Nationwide Title, which has about 175 employees, provides document imaging, tracking,retrieval, recording and processing on bulk loan transfers for lenders, servicers and investors. It’sthe largest third-party processor of mortgage assignments, handling more than 350,000 last year,Senior Vice President Jeremy Pomerantz said in a telephone interview. The company alsoprepares lien releases, which show that a mortgage has been paid off by the borrower.Assignments, which are usually recorded with county land record departments, list the buyer andseller of a loan as it’s sold or packaged with other loans into a mortgage-backed security.
 
Lawyers for homeowners are challenging the legitimacy of the documents, which are relied onby lenders to show they have the right to foreclose.Batches of 30,000(While closely held Nationwide Title in the past offered a package of foreclosure-specificservices, it had just one client, Pomerantz said. The company often doesn’t know whetherdocuments it prepares will end up being used in foreclosure cases, he said.)Nationwide Title’s proprietary system isn’t entirely automated, said Erika Lance, senior vicepresident of administration. Employees receive requests from clients for lien releases andmortgage assignments, which are often sent in batches of as many as 30,000. They review theinformation and images of loan documents sent along with the request, and the information iskeyed into the computer system.The computer system fills in the electronic assignments in the format and wording each countyrequires, and places a signature and notary seal from a list of employees approved by each bank.Bly and other signers are given a title at the bank requesting the documents, such as “vicepresident” or “assistant secretary,” depending on what the individual counties require, Lancesaid.Laws Catching UpNationwide Title files documents with scanned signatures in the 10 percent of counties in theU.S. that accept electronic mortgage assignments, including those for cities such as Chicago,Miami and Seattle, according to Lance. She said producing electronic signatures in bulk iscommon in the industry.“The laws are catching up to what is occurring with documentation,” she said. “Electronicrecording is an accepted method of document recording.”Nationwide Title isn’t alone in using electronic signatures. Angela Nolan, a JPMorgan Chasevice president in Monroe, Louisiana, testified in a January deposition that bank’s computersystem was inserting employee signatures, including hers, in random order on some documents.She said the digital signatures were used on allonges, which are added to promissory notes whenmore space is needed for endorsements.Random Selection“How is it determined which person’s signature will get on the allonge?”Dustin Zacks, anattorney for Ice Legal PA in Royal Palm Beach, Florida, asked during the deposition.“I believe it’s just a random process of making sure you have the individuals,” Nolan said.“There are certain titles that are required, assistant vice president, vice president, assistanttreasurer. I believe they just go in and randomly select those individuals.”
 
Thomas Kelly, a spokesman for New York-based JPMorgan Chase, declined to comment.
 
While the law allows for electronic signatures and seals on assignments and lien releases, thesigner must physically appear before the notary, and the notary must affirm the signer’s identity,that the signer is aware of what the document is, and that the signer is willingly executing it, saidMichael Robinson, executive director of the National Notary Association based in Chatsworth,California.Must Read“The guiding principles behind it are the same as the guiding principles around papernotarizations,” he said.Mark Ladd, a land-records technology consultant in Racine, Wisconsin, said the systems he’sseen require that the signer acknowledge that he’s read the document and that the notary isphysically present.“The law requires that somebody review these documents themselves,” Ladd said. “The personwho signs the document makes a statement that they read it.”Nationwide Title’s Pomerantz declined to say whether the company’s system requires signers toaffirm they have read the document. He said document inspectors, a job sometimes performed bysigners and notaries, review signatures and seals on a computer monitor. The notaries know theidentities of the signers because they work in the same office, he said.Relying on Staff “The signature is required to authorize it,” Pomerantz said. “The signature is not testifying in anyway that they prepared that or personally validated the information. They rely on their staff tovalidate.”Missing or incomplete paperwork has forced lenders to routinely recreate documents to showcourts they have standing to seize properties, said Jim Miller, the executive who oversawforeclosure-processing operations atJPMorgan Chase & Co.from 2005 to November 2008.About a third of foreclosure files his teams handled were missing mortgage assignments.
 
Servicers would often write new assignments when judges requested proof that the party seekingto repossess a property had the right to do so, he said.“What used to happen before the robo-signer issues is that you’d find out while in the foreclosureprocess that assignments needed to be done, and you had time to clean it up before the actualforeclosure solidified,” Miller said in a telephone interview.At JPMorgan Chase, where Miller was managing director of the default group, the companybegan fixing documentation prior to foreclosure more than two years ago in response to courtrulings requiring lenders to show evidence of owning the loan before taking legal action, he said.

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