Wednesday, October 12, 2011

County Recording Official Discovers Robosigning Not Limited To F'closure Docs; Mortgage Release On His Own Home Signed By Notorious Signature Scrawler

In Fort Wayne, Indiana, The Journal Gazette reports:

  • Allen County Recorder John McGauley knew property documents with suspect signatures were prevalent. After all, there were so many that a year ago the nation’s largest banks had to halt foreclosures to deal with the sea of paperwork that could not be trusted.

  • The problem was so big it spawned a new word to describe it: “robo-signing,” meaning offices filled with low-paid workers signing documents they had never read, documents they were not qualified to sign and often signing someone else’s name.

  • Still, McGauley was surprised to hear that robo-signing was not limited to foreclosure documents but was being found on thousands of homeownership documents having nothing to do with seized homes.

  • He was even more surprised when a quick check of Allen County records revealed more than 8,000 suspect documents have been filed here since 2006 – records McGauley’s office is charged with preserving as the final word in property ownership. “It was just like reaching into a hat where your number was on more slips of paper than it wasn’t on,” McGauley said. “Everything you pulled out was another one.”

  • But the real surprise was when McGauley looked through the documents for his own home. The mortgage release on the house he and his wife sold in 2005 bears the signature of Linda Green – the most notorious robo-signer in the nation. “This is the kind of thing that can really upset people because the biggest investment most people will ever make is their home,” McGauley said. “It’s frustrating me.”

  • It could be frustrating millions soon and frustrating an already-battered real estate market. If invalid documents are discovered in the chain of ownership, it could delay a home sale or make it difficult for buyers to get a mortgage because title insurers will not write a policy for the property, said Justin Ailes, vice president of government affairs of the American Land Title Association, which represents the title insurance industry.

  • Banks and other mortgage lenders will not write a home loan without title insurance. That means your house – even if you’ve never missed a payment or had an ownership dispute – could be impossible to sell until the documents are verified, or it could be impossible to buy your dream home.(1)

For more, see Signing scandal hitting home (Dubious names affect verification of deeds).

(1) County Recorder McGauley had this observation on the state of affairs created by the robosigning scandal and its affect on all title to real estate, including those titles unaffected by foreclosure:

  • For a hundred years, the property ownership system in Indiana was based on trust. You assumed you could trust the documents recorded in the recorder’s office. That has deteriorated,” he said. “This is supposed to be the public record. It becomes history. … At best, it muddies that process; at worst, it turns it into garbage.”

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