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Reply #33: Are Remotely-Processed Mortgage Assignments Another Smoking Gun? [View All]

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-02-11 08:33 AM
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33. Are Remotely-Processed Mortgage Assignments Another Smoking Gun?

Assignments of mortgages are the legal instruments that transfers ownership of a mortgage from one party to another. In a securitized mortgage, a trust holds thousands of mortgages on behalf of investors. The investors in the various bonds that get cash flows from a single trust expect the trust to be in a position to take advantage of the rights conferred by the mortgages when certain events occur, usually payoff or default...I used my crowd-sourced online software,, to help categorize 2,500 assignments in Palm Beach County, FL, which were recorded in late 2008 and early 2009. Palm Beach County, like any Florida county, is a high foreclosure state and, thanks to strong public records laws in Florida, serves as a good bellwether about bank business practices both in Florida and around the country....Common sense would say that an assignment should be executed either by a lawyer for the trustee for the trust, or an agent of the trust, which in this case would be a servicer or a lawyer working for the servicer. Lawyers should be geographically close to the foreclosed property, because they will need to eventually appear in court. Bankers should be close to major banking operations, since they almost always sign as senior officials: Vice President is the most typical title. We know from the robo-signing scandal that the signers dont read what theyre signing, but it is also apparent that theyre scattered almost randomly around the country. In my 2,500 sample size I studied the county of notarization, which indicates where the primary signers are since the notary attests the documents were signed in front of him or her. This batch of assignments were signed in 35 different states, and 101 different counties. So much for consistency.

The most common county is San Bernardino, CA, which filed 746 mortgage assignments, 29.8% of the total. California overall notarized 815 Florida assignments, 32.6% of the total. Florida, which youd expect, came next with 610 assignments, or 24.4% of the total, followed by Minnesota (9.3%), Texas (7.3%), Ohio (4.8%), Georgia (4.5%), Louisiana (2.8%), and Nebraska (2.6%). All other states had less than 2%...It isnt clear why San Bernardino, a large portion which consists of the Mojave desert, signed off on almost one in three assignments for Palm Beach County, FL, a tropical oasis on the other side of the country. The overwhelming majority of these assignments involved HSBC or US Bank. Virtually every assignment from San Bernardino had the notarization page entirely separate from the actual assignment, despite more than adequate space for the notarization on the first page, the practice virtually everywhere else. The notary is signing, under penalty of perjury, that the document was signed in front of them and that everything on it is kosher. If I didnt know better and, actually, I dont it almost looks like the notarization pages and the assignments were being prepared separately then put together after the fact.


I dont know if these assignments are illegal, or even if theyre unethical, but stealthily moving vast amounts of property for far away communities seems strange: an eye popping amount of mortgages changed hands with these assignments. Robosigning is not a victimless crime. The reason we have careful, document-intensive processes for handling real property is that it is the foundation of a nations wealth. A home is most families biggest asset. The practice of having independent parties verify the validity of signatures dates back to the 1677 Statute of Frauds. It was implemented because the lax evidentiary standards of the early 1600s allowed rich people to hire experts who would swear falsely in court about the ownership of property. The result was court-sanctioned theft and rising disorder. There are plenty of legal, ethical, economic, and financial problems with document abuses and fraud. But more than any single problem, robos rob trust. Banks are using faceless robos in rural California, Louisiana, and Nebraska to rob the people of Palm Beach County of the protection of the law and in many cases, their homes. This irrevocably destroys trust, not only with the banks that employ the robos but with everybody else too. Since banks are realistically a commodity but-for trust, youd think that banks, especially brand-aware consumer banks, would have moved long ago to stem these practices...
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