Freddie Mac Foreclosures and the Robo Sign Case
Nye Lavalle is credited with first coining the phrase “robo signing” in 1999. This is the practice where there is a named person who signs the foreclosure notices. This person will not know all the details, and certainly not have been involved in any processes that may be carried out to try to save the house for the owner. There is something deeply impersonal about robo signing, although it is not illegal in many states. The question could be asked if there is the need to look at cases where mortgages are clearly in default, as there is a case to answer here. Lawyer Michael Patrick Rooney believes that there is.
In order for a case to stand up in court, all the paperwork must be correct. In California, papers must be signed by a notary and unless this has happened, the papers cannot be presented as evidence or proof of action. Therefore, any foreclosures agreed under these circumstances could be subject to requests for reversal. With so many possible foreclosures, it is the fastest way to deal with the amount of legal notices that need to be signed, but the corner cutting fails when the corner cut is a legal requirement.This corner was the personal touch, and papers were presented without proof a proper review.
It was clear that many signers could not have reviewed all the cases they were signing off. In Florida, however, the legality has now been questioned, and the decision is that the foreclosure can go ahead. Other judges in Florida may rule differently, but it is clearly not as shut and closed a case as it is in California. For Freddie Mac Foreclosures, this has been a problem. This practice goes against the requirements that it give to banks, and mortgage company wants to make sure that all foreclosure it is handling have been properly executed. As Freddie Mac and Fannie Mae are dealing with hundreds of thousands of foreclosures, both cannot be sure how many will go ahead and how many will be appealed.There is a concern that even of someone buys a home that has been recollected this way, they may have a claim against the new owner. Depending on whom the new owner bought the property from, they may try to pass the claim onto them.For this very reason alone, Freddie Mac may have reason to be concerned.
