In March the major mortgage lenders in the US said they would stop dodgy foreclosure proceedings which caused such scandals last year, but according to a Reuters investigation many are still continuing to use techniques such as robo-signing.
Their investigation has found that many loan providers are continuing to file foreclosure documents that have been improperly read or checked. It has found at least half a dozen so-called robo-signers who have signed thousands of mortgage assignments in recent months.
These are the documents which prove who owns a mortgage once it is sold by the original lender. These robo-signers have already been identified in court rulings and depositions as having signed foreclosure documents without reading or checking them. Apparently they are still continuing with this practice.
Apparently recent federal settlements haven't deterred lenders, as the majority of those facing foreclosure are delinquent borrowers. Experts are advising homeowners to contest incorrectly filed foreclosure papers to protect their rights.
Just four short months ago the federal bank regulators signed settlements with 14 loan services, who as part of the settlement had to promise internal investigations would be carried out and that they would stop the filing of false documents. Unfortunately the Reuters investigation has found that at least five of the companies involved have filed foreclosure papers which may be incorrect.
These companies include Bank of America, HSBC Bank USA and Wells Fargo. According to the banks they stopped this practice last fall and they deny filing any false documents since this time. The banks believe that their foreclosures are legitimate, although they concur there may be a small number of cases that are coming in for criticism due to misinterpretation of the law.
While most bankers and judges believe that people should pay their loans or face losing their property, increasingly judges are ruling that foreclosure based on flawed or incorrectly filed evidence violates long-standing laws protecting people's property rights.