WIth the banks still dealing with the effects of ROBOSIGNERS I just thought I would post here a blog post on my website from last fall.
I can still remember that moment like it was yesterday.Â The movie scene starts out harmless and with little fanfare, but it
quickly spirals downward into a graphic smorgasbord of blasting guns, spraying blood, and tearing human flesh. Â To shield my innocent mind from a lifetime of trauma, my mom quickly reacted with the classic â€œhand over eyesâ€ maneuver that is a staple in any caring motherâ€™s repertoire (second only to the extended â€œarm over chestâ€ action during any sudden stops in the car).Â This maternal move was usually reserved for extended love scenes (the clay molding scene in â€œGhostâ€ comes to mind), but was implemented in an emergency measure during a 9 year-olds first â€œRâ€ rated action movie experience, a cinematic classic entitled, â€œRobo-Copâ€.
As weâ€™ve come to find out in recent days, Robo-Cop is not the only â€œrobo-entityâ€ responsible for massive carnage and human suffering.Â This past week has revealed another sinister character in the massive national foreclosure crisis, an antagonist affectionately known as the â€œRobo-signerâ€.Â
Apparently, in an attempt to expedite the long and arduous foreclosure process, banks were employing what has been dubbed â€œrobo-signersâ€ to perform the necessary review process before finalizing judicial foreclosures.Â According to news reports, these â€œrobo-signersâ€ would handle upwards of 750 files PER DAY, blindly signing THOUSANDS of documents without verifying the information that was REQUIRED BY LAW.Â Nothing like dotting your iâ€™s and crossing your tâ€™s, eh guys?
This recent revelation has now prompted 3 of the countryâ€™s major lenders (Bank of America, GMAC Mortgage, and JPMorgan Chase) to place a hold on ALL foreclosure sales in the 23 judicial foreclosure states, and some have now extended that to include all 50 states.Â As of this writing, Wells Fargo has not committed to any kind of a moratorium on its foreclosure sales, but it has said that it will take a close look at their foreclosure process and make any necessary changes.Â Well, apparently that response just wasnâ€™t good enough.
Our ever-compassionate elected officials in Washington, D.C. are now getting involved as consumer advocates.Â Just about every Congressman and Senator has come out loud and proud calling on a NATIONAL moratorium for all foreclosures.Â Iâ€™m sure their involvement has everything to do with mother henâ€™s desire to protect her constituent chicks and nothing to do with political posturing in an election year BUT perhaps someone needs to remind them that foreclosure law is a state matter.Â They donâ€™t have the authority to interfere, but then again that didnâ€™t stop them in regards to Arizonaâ€™s immigration law.Â So the drama continuesâ€¦
The bottom line is that the already incredibly slow process of eliminating shadow inventory and stabilizing the housing market will slow even further.Â Â The sharks, errrrâ€¦I mean lawyers, can already smell the blood in the water and are preparing legal action as we speak.Â I will be interested to see how a homeowner who has violated their â€œpromise to payâ€ (promissory note) and has been living rent free for 20+ months is going to convince a jury that they were â€œharmedâ€ by the poor review of their foreclosure file, but lawyers have pulled better tricks than that.Â Remember, â€œIf the glove doesnâ€™t fit, you must acquit?â€
These last few years have certainly been a challenge for our industry, but if this robo-signer mess has the negative effects speculated by some, I may be forced to cover my own eyes.Â Hey mom, just tell me when itâ€™s overâ€¦