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HUD Inspector General fills in some details on robo-signing and other abuses

posted by Jean Braucher

For those without enough reading after the legal document dump on Monday in the national mortgage settlement (see http://www.creditslips.org/creditslips/2012/03/national-mortgage-settlement-details-posted-on-the-web.html), there's more. Also released Monday were five audit reports about the robo-signing and other abuses in the foreclosure processes of the five financial institutions involved in the settlement. http://www.hudoig.gov/reports/featured_reports.php These reports indicate that higher ups were directing many of the abuses, evaluating line employees based on high volume production of documents without concern for their accuracy.


I read one of the audit reports. I disagree with the word "abuses". I agree that there is an astonishing failure rate which I would call other things and like any process with high fail rates, reform is in order. But when I see things like: "the lawyers prepared the affidavits" - ?? -- that is normal - that is what lawyers do! Affidavits are filed in court, where lawyers practice. Clients don't prepare their own affidavits in any line of legal practice I have encountered. When I see the supervisor did not "reverify" the foreclosure information, I would not call failure to "reverify" something an "abuse". To "verify" implies a second look to begin with. Reverify must mean a third look. Or when they note officers were given titles only so they could sign documents - so what? That equally describes a power of attorney. Lots of documents are signed by powers of attorney. No one calls that an abuse. Again, the process generates too many errors to be allowed to continue as is, and there can be true abuses (false affidavits of service for instance) but the specific complaints in the report I read do not strike me, as a practicing lawyer, as "abuses". They strike me as normal processes being executed by people with an utter lack of due care.

I don't think this is about lawyers drafting affidavits as an abuse. Rather it is about lawyers preparing affidavits for line employees to attest under penalty of perjury that they (the employees or "officers") had made investigation and had personal knowledge of facts stated in the affidavits, when the lawyers knew or should have known that the employees had no knowledge and had made no investigation of the facts and were signing hundreds or in some cases thousands of affidavits a day without checking facts to which they were attesting to have personal knowledge.

County DAs concerned for the rule of law and property values in their counties should be preparing criminal forgery charges against the foreclosure-mill lawyers that have been forging documents in in their counties for the last several years, and state bars should be disbarring them. County DAs are just waking up to this, and there is a nationwide move afoot by the Occupy people to give them some assistance...

I suggest going back and reading the predicates to the business records exception to hearsay and then asking yourself, if the affidavits were redrafted to match precisely the business records predicates, would the points you just made in your comment above be negated? I think they would be. They may not have personal knowledge of the specific loan but that is not a prerequisite to admissible evidence. And if that is all this about, is that an "abuse"? I don't think so. I think it's half poor lawyering and half the lawyers understandably assuming the banks' records are better than they appear to be. These are loss situations and banks aren't investing in losses. So they assign the lowest qualified and lowest paid employees and matching lawyers to the task. And you get what you pay for.

mt- Your points may or not may hold with respect to some affidavits, but those are a small part of the issue. These lawyers --working on the direct orders of the foreclosure mills, servicers and banks-- created forged assignments, allonges, transfers, etc., days or hours before foreclosure hearings, bearing whatever statements, forged signatures and dates were necessary.

This was not robo-signing. This was not the preparation of an affidavit where the lawyer was uncertain as to the affiant's personal knowledge of the statements expressed. No, these were criminal forgeries of specific false documents for a specific purpose.

This was done so often (in about 80% of foreclosures since 2008, according to some estimates based on random samples) that if you were to go down to your local county courthouse or record-keeper and pull a random, moderately-sized sample of foreclosure files, you would quickly be able to identify the law firm involved in pushing through different groups of foreclosures BY THEIR FORGERIES-- by the font, the formatting, the signatures, etc. The patterns are obvious.

Similarly, the relatively small number of authentic assignments, etc., also stand out as obviously bearing indicia of authenticity. You can't miss them.

This was not "poor lawyering." These were crimes. Period.


I don't disagree with you. I was only commenting on what I read in the audit report which did not involve forgeries and did not imo rise to the level of "abuses".

These affidavits served no purpose, and were false, since the affiants did not know what they said they knew. According to one report, some robosigners signed eight thousand documents a month (sometimes in less than two hours a day) with no notaries in the room. Moreover, most of the data was prepared in India and executed in the US. One quote –“Her standard practice in signing documents was to scan the document, ensure that her name was listed and then sign it. Manager 4 estimated that she would execute 100 documents per day in ½ hour or less. She stated that notaries were not present when she executed documents.” Having a ahrd time seeing how this is not abusive since it is false and misleading.

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