A U.S. Department of Housing and Urban Development (HUD) investigation confirmed last week that Bank of America, Wells Fargo, JP Morgan Chase, Citigroup, Ally Financial (previously, GMAC) and other mortgage lenders were guilty of robo-signing foreclosure documents, contributing to the mortgage and foreclosure crisis.
When a mortgage lender, such as Bank of America, processes foreclosure paperwork, it is required to verify the accuracy of certain information. These foreclosure documents must be signed by bank personnel, stating that they have personal knowledge of the facts contained. Robosigners were signing the foreclosure paperwork without knowledge of the information stated in violation of Florida foreclosure laws and those of other states; the required investigation and verification of the accuracy of the documents was never done.
Results of the HUD investigation were compiled into a 27-page document that included statements from Bank of America employees admitting to signing without verifying hundreds of foreclosure documents daily. The practice led to some foreclosures being filed against Florida homeowners and elsewhere throughout the United States based on faulty information, forcing homeowners to defend against an inappropriate and even invalid foreclosure lawsuit.
Bank of America essentially notes that the result of the robosigning investigation is old news. They claim to have addressed any internal problems and to have eliminated any improper signing of foreclosure documentation.
While mortgage lenders may claim that the bad practices have been corrected and the recent mortgage settlement that included Florida and several major banks suggests that foreclosure fraud and the foreclosure crisis are ending, that is not necessarily true. Florida homeowners facing foreclosure, or still caught up in the foreclosure process, should consult a foreclosure defense attorney to discuss all available options to fight the foreclosure, save the house or to walk away in the best position possible.