Mortgagee sales: the US “robo-signing” crisis

In Australia, the process of mortgage enforcement is controlled by a range of laws and processes including State Property Law Acts, the National Credit Code, the Mutual Banking Code of Practice and Court Rules (if orders for possession are required).

Large USA banks have been hit by claims that hundreds of thousands of mortgage foreclosures were defective as a result of “robo-signing” by staff who did not follow procedures or were not even trained.

A lawyer for home owners has claimed that in an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training to “rubber stamp” documents.

Attorneys general from all 50 states are reported to have banded together to open an investigation into whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures.

Also see Forbes and The Guardian

In Australia, successful mortgage enforcement requires strict compliance. Call Bright Law to check if you are meeting the latest requirements.

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