'Robo-Signer' Foreclosure Scandal May Threaten Fundamental Financial Stability, Government Watchdog

[Joanne98]

The ongoing "turmoil" roiling megabanks and their faulty home foreclosure practices may represent deeper, more systemic problems regarding the origination, transfer and ownership of millions of mortgages, potentially putting Wall Street on the hook for billions of dollars in unexpected losses and threatening to undermine "the very financial stability that the Troubled Asset Relief Program was designed to protect," a government watchdog warns in a new report.

Recent revelations regarding mortgage companies' use of "robo-signers" when processing foreclosure documents "may have concealed much deeper problems in the mortgage market," according to the Tuesday report by the Congressional Oversight Panel, an office formed to keep tabs on the bailout.

Disclosures by big banks that they employed people whose sole job was to essentially rubber-stamp foreclosure documents without reading them or verifying basic facts led firms like JPMorgan Chase, Wells Fargo and Bank of America to halt home repossessions beginning in late summer and early fall.

In turn, all 50 state attorneys general, federal prosecutors and a host of federal agencies began probing exactly what went wrong, and whether the use of robo-signers represented a one-time mistake or if they're emblematic of broader legal shortcuts taken to cut costs and disguise other shortcomings. The industry is fighting to calm regulators, investors, and members of Congress by arguing the revelations represent isolated cases that are being quickly resolved.

http://www.huffingtonpost.com/2010/11/16/robosigners-foreclosures_n_784098.html

[Tippy]

1. Wonder how much the BIG banks paid these people

They the big B had to know the truth....

[MedicalAdmin]

2. The fear campaign is already starting.

Corporations exist at our leasure. We need to bust some heads and make some examples. This is fraud on a scale never before seen. Thousands should already be in jail and 10's of thousand should be on the way there. Instead not one person is even being charged. The foreclosure courts are actually looking fraud in the face, shrugging their shoulders, and letting the banks try again to come up with less fraudulent documents.

[tridim]

3. That's what my lawyer said too.

"If you win, the entire economy will collapse".

Then she said "Unfortunately you wont win, because the banks have too many lawyers to throw at a case like this".