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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21 Comments

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holisticpets8

Very good article and, as you so correctly point out, the area of these signatures is a gray one. What does disturb me is the implication that Nationwide was trying to 'pull the wool over people's eyes' or do something shady, rather than this is something that is standardly done in the industry and banks have done just this thing for years and years and years. It's only because of the real estate melt down and resultant foreclosures that the practice was even brought into question. I do agree that this is a matter to be sorted out judicially. I've read some of the comments by the Forrester Law Group on their site too. They are 'standing up' for the foreclosed upon homeowners against the banks. I happen to know one of those who was represented by this group. She had lost her business and had stopped making payments to the bank on her home. She was exploring ways to stay in her home without paying and had done so for over a year when she came across Forrester. Her comment to me? I may get my home for free because the bank probably does not have my original deed. Her result? Her house was foreclosed on and rather than paying the bank, she paid Forrester instead for legal fees.

November 23 2010 at 3:44 PM Report abuse rate up rate down Reply
swkoppy

The question here is not if the banks or the homeowner are right or wrong.It is a matter of law and due process.Liens come on a first come basis and have to be filed correctly in orderly fashion.When that chain is broken for what ever reason the rights revert back to the person having the correct legally in order lien.Filing false paperwork to the court to to put yourself ahead of others knowing this not to be true is a serious matter.The problem the courts have today is if you allow these laws to be broken then why not allow all of them to be broken.Then there is not laws at all and there is no jutice for anyone.The legal system would grind to a halt.Laws are the only thing we have to keep our society stable.

November 11 2010 at 9:36 PM Report abuse rate up rate down Reply
danlex1

This just keeps getting more ridiculous as time goes on. This is a flagrant attempt to confuse the public. An Assignment of Mortgage (of Assignment of Deed of Trust in western states) is merely an instrument that evidences that the loan has been sold between lenders; it has ABSOLUTELY NO EFFECT on the terms of the loan. NONE. The only effect it has on the borrower is that he now sends his payment to a different lender. PERIOD. As for the notarization issue, in most states, Notary statutes provide that a Notary may acknowledge a signature based on "personal knowledge." This was created for this very situation---a situtation where the Notary and the signatory are employed by the same company and know each other. It eliminates the unnecessarily burdensome practice of personally witnessing a signature you already know as well as your own. You hold a copy of the signatory's identification in your Notary records and you acknowledge all signatures based on that. The newly-created phrase "robo signing" was coined merely to confuse and cast a shadow of evil upon a completely benign business practice. Moreover, IF there is a failure in the Assignment document, that is an issue between the two lenders; it does NOT negate the fact that the Borrower has NOT been making his payments, which is the REASON for the foreclosure. Sheesh. This is just further effort to shift resposibility from people who took out loans they couldn't repay, so the government can justify further encroachment into our lives and private industry in an effort to "protect" the poor "idiots" who can't protect themselves from "greedy" bankers. And, based on these posts, a lot of people fall for it. Sad.

November 11 2010 at 12:11 PM Report abuse +2 rate up rate down Reply
1 reply to danlex1's comment
Wayne

Confuse the public ... OK nimble minded one, Then you tell me who do I pay when BofA can't tell me who owns my NOTE. Do you think it is fair to pay someone who is not the Note Holder? When I go to my Deed of Trust at the recorder's office their is only me and my original lender (the Pretender Lender) who put my Deed in a mortgage pool and sold the package to Countrywide. So they tell me. Their is no record of this. My original lender does not exsist anymore and some of them are going to jail on federal charges. Bank of America says they are my servicer and at first they refused to tell me who owns my loan ... Now they tell me it went to MERS and when I go to MERS's Web Site and enter my information in their home page it comes up "Nothing Recorded". There are several ways to enter the information and each and everytime it comes up Nothing Recorded. So my Dear Comment Writer daniex1 ... now what do you say?????

November 11 2010 at 9:01 PM Report abuse rate up rate down Reply
joma5004

Banks using a shady company to increase their profits at the expense of its customers. Time to get rid of these "robo" signers and force the banks to do due dilligence on every foreclosure!

November 11 2010 at 10:32 AM Report abuse rate up rate down Reply
Wayne

To pfjw .... I see your somewhat on top of this ... So let me ask you a question and I will even give you my e-mail address. You go to the recorders office and you find the only people on your Deed is yourself and the original lender who lent you the money before he sold it. Now you ask the servicer "who owns your loan and who owns your Note" and they won't tell you only because you find out "They don't Know"!!!! WOULD YOU PAY THE SERVICER? Now mind you the new disclaimer they are putting out is "if your note has been lost stolen or destroyed" we are not liable.

November 11 2010 at 10:30 AM Report abuse +1 rate up rate down Reply
Bill

I am wondering if it is as legal as Nationwide claims then why have a robo signer at all? Just toss them out since they are the judge, jury, and executioner.

November 11 2010 at 9:50 AM Report abuse rate up rate down Reply
1 reply to Bill's comment
Wayne

Exactly .... very well said.

November 11 2010 at 10:32 AM Report abuse rate up rate down Reply
orbit7777

My neighbor, who was a dean at a local college before retirement and a pillar of this city, got into a big fight with a LOCAL bank about a payment that was to be the final one on her home loan. They claimed she hadn't paid it, and she had the proof that she did. If something like this could happen when you can see the lender face to face and they know you have a sterling reputation, how much worse could it get with the tangled up mess the mortgage industry is in today. A lot of people posting on this board don't have a single clue about many things, let alone the mortgage industry.

November 11 2010 at 8:34 AM Report abuse +2 rate up rate down Reply
k4jlp

IN THE 1990'S THERE WAS A COMPANY NAMED SELECT PORTFOLIO SERVICES IN UTAH THAT WAS NOT APPLYING CUSTOMERS PAYMENTS PROPERLY...THEY WERE SUED IN FEDERAL COURT IN NOVEMBER 2003 (FTC VS FAIRBANKS CAPITAL IF YOU WANT TO LOOK IT UP ON THE FTC WEBSITE) AND SPS LOST THE CASE..SPS PUT MANY MANY FOLKS INTO FORBARANCE AGREEMENTS AND A LOT INTO FORCLOSURE WHO COULD NOT COME UP WITH THE "THOUSANDS" SPS SAID THEY OWED...THIS WENT ON WITH OTHER BANKS...STEALING IS WHAT YOU CALL IT.

November 11 2010 at 7:29 AM Report abuse +1 rate up rate down Reply
Lawrence

The Robo-Signers violated Section 1010 Title 18 of the US Code by knowingly making false statements involving Federal insured mortgages..The owners and managers conspired to violate Section 1010...Submitting fraudulant documents to the Court is a felony and is punishable by 10 years in a Federal Slammer and $100,000 fine...per count. Mass fraud of this nature is not to be ignored nor taken lightly as our system depends on clear cut laws and procedures for it's continued existence..Fine the firms into oblivion, Owners and managers do 5 years hard time,$5 million fine... Bryan, Crystal and Doko 3 years suspended sentences,$500 fine... Individual civil cases to be heard on the fraudulent foreclosures...Next Case !..

November 11 2010 at 3:54 AM Report abuse +2 rate up rate down Reply
michaelphldlph

I sorry but I don't understand all the legal nitpicking. If someone takes a mortgage to buy a house, that means that the bank is lending that person money to make the purchase, and the loan is secured by the property. If the person taking the mortgage fails to repay the loan,the house goes into foreclosure and ownership is transfered to the bank so that it may recoup its money. So, as long as the mortgagee cannot contest the fact that he hasn't made the required payments,it would seem that who signs the forclosure document is irrelevent.

November 10 2010 at 10:00 PM Report abuse -2 rate up rate down Reply
3 replies to michaelphldlph's comment