Homeowners In "Non-Judicial" States Face Additional Hurdles In Dealing With Foreclosing Lender-Created Robosigner Scandal

An excerpt from a recent story in The Dallas Morning News serves as a reminder as to how much more difficult it is to deal with the foreclosing lenders' "robosigner" scandal in Texas and other so-called "non-judicial" states, where the onus is on the screwed-over homeowner to initiate legal action against the lender in order to obtain their faulty and/or fraudulent foreclosure documents:

• It is virtually impossible for average homeowners to determine if they're victims of robo-signers. "It will be difficult for a borrower on his or her own to spot this particular problem," said Karen L. Kellett, a bankruptcy attorney at Armstrong Kellett Bartholow. "It has been the very falseness of the documents that could not be detected because such documents were constructed, on their face value, to look normal and thus feed the foreclosure machine." Their falseness wasn't detected until lawsuits were filed challenging affidavits and depositions, she said.

• Texas and other states without judicial oversight may be particularly potent breeding grounds for such fraud, legal experts said. "I think that's absolutely right," said [Kellett law partner Theodore] Bartholow. A judicial-foreclosure state requires lenders to "put the documents they're relying on in front of the court and in front of the borrower," he said.

• "In a non-judicial foreclosure, the borrower likely would never see the documents that the lender is relying on to establish its right to foreclose," Bartholow said. "The likelihood of being caught for it is substantially diminished in a non-judicial foreclosure because you don't see the documents. There's no judge to review those documents."(1)

For the story, see Facing foreclosure? With document scandal, it's vital to act.

(1) The story points out that, in Texas, exceptions exist when a foreclosure stems from a home equity loan or a reverse mortgage, which reportedly must go through the courts. Except for those cases, the foreclosure process in Texas has a short timeline, the story states.