Laid Off Robosigner Blows Whistle On Foreclosure Mill; Describes Boiler Room Operation Allegedly Set Up To Crank Out Docs w/ Falsified Signatures

In Baltimore, Maryland, The Baltimore Sun reports:

• Prosecutors have launched an investigation into a complaint that more than 1,000 deeds for homes foreclosed upon in Maryland were improperly executed — the latest development suggesting widespread problems in the way foreclosures have been handled in the state.

• The complaint, filed last week by a paralegal formerly employed by the Shapiro & Burson law firm, lays out allegations that attorneys who were supposed to be signing deeds and key foreclosure paperwork for Maryland properties instead instructed others to falsify their signatures on the documents.

• "We're looking at this case very closely," said Ramon V. Korionoff, chief of staff to the Prince George's County state's attorney, whose office is investigating. "It's very troubling."

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• State regulators said this week that they also have received complaints about alleged foreclosure-documentation problems at the Baltimore law firm of Friedman & MacFadyen. Four notaries employed there resigned their commissions earlier this year after inquiries from the Maryland secretary of state's office, according to the agency.

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• Charlene Perry, who specializes in foreclosure title work as vice president of Preferred Title Group Inc. in Baltimore, calls a deed with a false signature "a huge problem" that could come back to haunt a later homeowner if it is challenged. Most homebuyers purchase title insurance, so it would be up to the insurer to pay for their legal defense, she said.

• "I don't think the consumer at the end of the day is going to lose. But they're going to lose sleep," said Perry, who has worked in the title industry for more than 25 years. "They're going to be on pins and needles: 'Do I own my home?' "

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• The complaint against Shapiro & Burson was filed by Fairfax resident Jose Portillo, 42, a notary who worked for the firm as a paralegal for nearly three years. He said he decided to file a complaint against his former employer after he and about 10 co-workers were laid off in February. He met with Civil Justice to offer information he thought would be helpful in the group's foreclosure litigation work and then prepared the affidavit last week.

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• He described a boiler-room atmosphere, much like that at mortgage companies during the housing bubble, in which employees were overwhelmed with work. He said his shift regularly stretched into 12- and 13-hour days. Employees in another department handling foreclosure sales sometimes stayed until 4 a.m., he said.

• Portillo said he knows he is putting his Virginia-issued notary commission at risk by acknowledging that he improperly notarized documents. He said he decided to complain because it upset him that the firm laid off employees who followed instructions, while those who gave those instructions are still on staff. He said he hopes regulators see mitigating reasons to excuse his own notary violations.

• "It was implied that my job was at stake," said Portillo, who had already gone through a five-month stretch of unemployment in 2007 after settlement work dried up. "I know what I saw, and I have no qualms testifying and reaffirming my affidavit."

For more, see More foreclosure irregularities alleged in Maryland (Former law firm employee says over 1,000 deeds were recorded with false signatures).