Florida foreclosureAccording to its website, Nationwide Title Clearing is a Florida company that "process[es] lien releases, assignments, MERS services, final documents, mortgage document recording services. . .and other custom business solutions." What the website doesn't explain, but depositions of three of Nationwide employees posted on YouTube by the Forrest Law Firm make abundantly clear, is that Nationwide provides these services by employing robo-signers.

Whether or not the robo-signers are problematic as a matter of law in this context is hotly contested between Nationwide and Christopher Forrest, the attorney who took the depositions and posted them on YouTube. The depositions describe an assembly-line process that's awful to look at, but Nationwide defends the system as being benign as sausage-making, while Forrest sees at a minimum tens of thousands of legally problematic documents.

Said Nationwide Senior Vice President Jeremy Pomerantz in a statement responding to a request for comment:
"We will continue to cooperate with those who are attempting to protect consumers and uphold justice, but it is unethical to imply that long-standing industry practices, which have been found in court to be legal methods of preparing common mortgage related documents [emphasis added], are somehow harmful to consumers. We're disappointed in how this was handled but are very proud of our employees for doing a great job of serving the firms that service mortgage borrowers and for clearly describing what we do in their depositions."
When I asked Nationwide what it meant by the bolded language, it explained that it doesn't prepare affidavits -- the sworn, based-on-personal-knowledge documents that are at the heart of the robo-signing scandal. Instead, it prepares "assignments of mortgage" and other documents that do not have the penalty of perjury attached to them.

Nationwide also emphasized that its practices are industry standard and that it did not prepare "foreclosure documents, which do require the person to attest to more specific knowledge of the information." As of publishing, Nationwide hadn't provided a court decision to cite for the bolded language.

Valid Notarizations?

Forrest acknowledges the distinction between affidavits and assignments, but he points out that the depositions describe people notarizing signatures without witnessing the signing:
"It appears to me, based on their testimony, that at a minimum tens of thousands of assignments of mortgage were executed outside the presence of a notary. To me that raises a serious question as to whether these assignments are legally valid."
Moreover, Forrest notes that one witness contradicts the others about the notarization process. "Someone is not testifying truthfully," he says, "because of the clear contradictions between them, in particular the notarizing process."

Nationwide contests Forrest's characterization of the notarization as illegal, saying the notaries in effect don't need to witness the signature. They're merely "attesting that the person was there and signed the document."

What About Factual Impossibilities?

Forrest also notes that the assignments make specific factual statements, such as acknowledging the receipt of "valuable consideration." And he says that makes signing the documents without reading them, or knowing what they mean, problematic beyond the notary issue. Finally, Forrest says that despite Nationwide's claim that these employees don't prepare "foreclosure documents," the depositions were ordered by a judge in a foreclosure case precisely because the judge found the assignments of mortgage to be related to the foreclosure.

One topic that didn't come up in the depositions, or in Nationwide's responses, is something that has rendered assignments across the country problematic. And that's the factual impossibility of some of them, such as a defunct corporation assigning a mortgage. Given the practices these employees describe, and the foreclosure industry's need for assignments to create chains of title that link extinct originators to the alleged present-day mortgage- and note-holder, it would be surprising if none of the Nationwide assignments had that problem.

With that context, what did Nationwide's employees say in their dispositons?

"E-Signing" -- a New Level of Disconnection


The deposed employees, Bryan Bly, Crystal Moore, and Durata Doko, have each worked for Nationwide for six or seven years, although Doko has been signing for less than three years. The details of the depositions vary and even conflict, but several core points are consistent: Each one signs thousands of documents a day in capacities that vary from vice president of a lender to witness to notary; none of them reads the documents; and none is particularly clear about what the documents mean.

In the depositions of Bly and Moore, a new level of disconnection between the robo-signers and the documents they "sign" emerged: "e-signed" documents that neither Bly nor Moore ever sees, but which someone in management has decided to electronically affix their signatures to. Documents are e-signed whenever the county destined to receive them allows it, but neither Bly nor Moore has any clue about how many such documents either has "signed."

One of the issues that has surfaced in robo-signing stories, such as at Lender Processing Services or the Law Offices of David J. Stern, is multiple people signing one person's name. All three of the Nationwide witnesses were confronted with documents showing different versions of their signature, but all denied that anyone else signed their names. They all insisted they had signed all their own documents. (Except, of course, the "e-signed" ones.)

For example, Bly said he initially had a one-initial signature until he was told to use two initials. He said his e-signature was his whole name because some counties required that. And he used his whole name to notarize because he got in trouble when he didn't. Asked to explain variations within each type of signature, Bly said it was "just how my hand caught" or "just how my hand was moving."

Both Moore and Doko made similar comments. Moore noted that when the documents were given them to sign, if was OK to use just an initial rather than a full signature, then the signature line would be "squiggly."

These flat denials of multiple signers caught Forrest's attention because the reason he sought the depositions was that the assignments of mortgage seemed very suspicious: All the signatures -- the lender's representative, the witnesses, the notary -- seemed to be in one person's handwriting.

Highlights from Bryan Bly's Deposition:

Bly said he signs 5,000 documents a day, including assignments of mortgage, but he doesn't know what those are. He spends less than a minute on each document, and he doesn't check any of the information before signing the document. He's a notary and routinely notarizes documents a "batch" at a time -- approximately 200 documents at once. He does that in his cubicle, which is near the people who are doing the other signing, but he has no line of sight to watch them sign. He also signs documents as a vice president of various financial institutions, relying on his bosses' statements that he has the power to do so.

One of the documents he signed -- or rather, "e-signed" -- shows him as a vice president of Digital Federal Credit Union. When asked, Bly explained that he was a VP for "signing purposes only." He admitted that he had never received a paycheck from Digital Federal Credit Union, never had a boss at Digital Federal, never had an office at Digital Federal and had never even spoken to anyone at Digital Federal.

Highlights from Crystal Moore's Deposition:

Moore signs around 3,000 documents per day, including as a vice president for myriad financial institutions including Citi Residential Lending and MERS. She doesn't know everyone she's signed for or who she's authorized to sign for. When asked about Citi, she admitted that like Bly, she'd never received a paycheck from Citi, had a boss, an office or any other contact with it. On one document, she signed that she lived in California; in fact, she's never set foot in the state. She simply signed the document because she was "supposed to."

Like Bly, Moore testified that she notarized stacks of documents at a time when in the same room as the people whose signatures she was notarizing, but she did not watch them sign, and in fact couldn't watch them sign from where she sits. Unlike Bly, she has a computer at her desk, but she never uses it to verify the information in the documents she signs.

Highlights from Duarta Doko
's Disposition:

Although Doko's testimony tracked the others in many respects, one sharp difference involved the notarization process. According to Doko, notaries sat at tables, signers came and sat with them, and signed in front of the notaries. On the other hand, she testified that when she signed as a witness, she didn't actually witness the person's signature. Instead, she received documents a batch at a time and signed them all at once.

Doko insisted she had signed only as a witness -- until she was presented with a document that she had signed as a vice president of "Financial Freedom Funding Corporation." She explained by saying: "I don't pay attention" and "I just saw my name and signed."

Another feature of the Nationwide employees' testimony that disturbed Forrest is the way the employees are portrayed as "vice presidents" of the financial institutions. Says Forrest:
I'm concerned that they're representing themselves as vice presidents of these banks when it's clear that they don't work for these banks and in most cases don't have any direct contact with the banks. I think the only reason they are called vice presidents is to convey that they have knowledge that they don't have.

They're trying to convey a false impression of who these people are. When I hear "vice president," I picture someone in a suit in a corner office, not someone in cubical assembly line churning out thousands of documents every day.
Forrest says the title is particularly misleading given how little the employees understand about the documents. "I was pretty floored," he says, "to realize that these people have no idea of the meaning of what they're signing or the impact that these documents have."

Defying Common Sense

I don't know the legal impact of the Nationwide documents, whether they're sausage or fraud. But having people execute documents they don't understand is problematic. Identifying Nationwide employees as vice presidents of financial institutions they've never worked for defies common sense. Labeling signatures "witnessed" and "notarized" when the witness and the notary didn't actually watch the "vice president" sign seems at odds with the basic concepts of witnessing and notarizing. Is the fact that these documents aren't executed under threat of perjury really enough to give them legitimacy?

But if Nationwide's robo-signing procedure isn't a legal fraud, it's certainly an affront to the reader of the documents. Anyone not knowing the industry's standard practice would assume the document, and the signatures on it, has the substance and meaning it appears to.

Legal documents aren't widgets, and they're not supposed to be produced as such. The pieces of paper at issue here transfer the right to take someone's home -- a weighty legal consequence -- and should be done with attention to their contents, not merely crossing the t's and dotting the i's of a jurisdiction's formal requirements. After all, the U.S. Constitution's Fifth Amendment guarantees due process before being deprived of property. Do courts really believe that these production-line documents are OK? I'm still waiting for Nationwide to name a case to support its comment above.

In the meantime, it's important to remember that Nationwide claims it's merely doing what everyone else does. That's a claim I believe because it gives insight into how the more obviously fraudulent robo-signing of affidavits started.

"People Need to Know"

When I asked Forrest why he posted the depositions on YouTube, he explained: "We posted them because this is information that needs to get out . . .there are a lot of practices going on in the financial industry that people need to know about." As a full-time foreclosure-defense attorney, Forrest has seen many different problems arise in his cases as a consequence of the practices.

Contrary to the banks' blanket denials that they've never tried to wrongfully foreclose on anyone, in cases that Forrest has defended he has encountered two banks trying to foreclose on the same mortgage; two foreclosure law firms filing suit to foreclose on the same mortgage; and banks trying to foreclose on properties sold for cash at a short sale. While those cases don't represent the majority of his clients, the numbers are significant, particularly when you consider that he doesn't represent all distressed Florida homeowners.

The wrongful foreclosure efforts that Forrest has witnessed underscore how crucial it is that each foreclosure is given sufficient scrutiny, although the Fifth Amendment should be reason enough. Unfortunately, Forrest explains that in Florida:
"There's lots of due process issues, including rocket dockets [courts hearing up to 1,000 cases a day] that could impair homeowners' due process right. It seems to me that foreclosure cases are sometimes treated differently with respect to due process than other types of cases. It may be because of the volume, or because the homeowner defaulted and owes someone a lot of money.

But we're not trying to get anyone a free house. We're trying to make sure that the correct bank is foreclosing and getting paid. These loans have been sold so many times it's a real problem making sure the right bank is the one that's foreclosing."

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