Robosigning Scandal Just As Bad (If Not Worse) In Non-Judicual Foreclosure States

CNBC reports:

• It's the next big shoe to drop in the robo-signing foreclosure scandal. Call it part two. We already know some banks halted foreclosure sales nationwide in October when it was discovered that servicers took short cuts, so-called "robo-signing" in the foreclosure sale process in judicial foreclosure states - about half the country.

• Now it appears they may have done the same thing in a different part of the process, the Notice of Default, which takes place in the other half - i.e. the non-judicial states - this happens before the foreclosure sale.

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• Last week an article from American Banker titled, "New Point of Foreclosure Contention: Default Notice" circulated widely among the folks who follow the mortgage mess. It talked about how several lawsuits are now being filed contending that the Notice of Default process was flawed and the foreclosure therefore invalid.(1)

For more, see The Next Robo-Signing Crisis?

(1) From the American Banker story:

• In a deposition on Jan. 4, Stanley Silva, a title officer at Ticor Title of Nevada Inc., said he "technically signed" default notices for clients, which were often acting as agents of other parties, which in turn worked for others.
  
  "The person at the bottom of the chain, by executing the document, has taken an action on behalf of all of them through their various agency agreements," Silva said. In one case, for example, he said he had signed "on behalf of Ticor Title of Nevada, who is agent for LPS Title, who is agent for National Default Servicing."
  
  "Who is agent for Fidelity National?" [Reno, Nevada attorney Robert] Hager asked. "Apparently, yes," Silva replied. "Which is a servicer for Wilshire?" "Apparently."
  
  Silva said under oath that he never reviewed any documents or knew what company was the holder of the original note at the time he signed the notice of default. He said he signed about 200 default notices over a four-year period.
  
  When asked by Hager if he signed notices of default "without verifying the accuracy of the information," Silva replied: "Correct."

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• "Because there's no court reviewing anything in nonjudicial states," abuses are "probably even more rampant," [North Carolina consumer attorney O. Max] Gardner said. "This is just another example of robo-signing in a different context."