The NYT's profile of the foreclosure case that first deposed a robo-signer in public was just awesome. CJR's Ryan Chittum says pretty much everything I wanted to say about it.
Except for this bit. There are a lot of statements in mass media and (eyeroll, please) WSJ editorials about how this whole mess is just "paperwork" or about "technicalities." I though this statement from the attorney in the NYT profile is the best takedown of that viewpoint.
He's describing the conduct of the deposed robo-signer (Stephan) - and what his conduct amounts to as a matter of law:
“When Stephan says in an affidavit that he has personal knowledge of the facts stated in his affidavits, he doesn’t. When he says that he has custody and control of the loan documents, he doesn’t. When he says that he is attaching ‘a true and accurate’ copy of a note or a mortgage, he has no idea if that is so, because he does not look at the exhibits. When he makes any other statement of fact, he has no idea if it is true. When the notary says that Stephan appeared before him or her, he didn’t.”That ain't no technicality. That's out and out fraud. When you picture that fraud resulting in someone losing their house, you get a better idea of what is and is not a technicality.
As a co-worker of mine pointed out - "To say that the lender not having the paperwork is a technicality - is to allow homeowners to dispute late or nonpayments by merely claiming that 'the check is in the mail - your not having the money is merely a technicality..."
Then there's WaPo's account of what happens in a foreclosure mill - one of the many law firms retained by banks to process their increasing number of foreclosures. These mills were paid by the unit, rewarded for speed - and even penalized for slow processing. It is not a pretty picture:
The law firm of David J. Stern in Plantation, Fla., for instance, assigned a team of 12 to handle 12,000 foreclosure files at once for big financial companies such as Fannie Mae, Freddie Mac and Citigroup, according to court documents. Each time a case was processed without a challenge from the homeowner, the firm was paid $1,300. It was an unusual arrangement in a legal profession that normally charges by the hour.
The office was so overwhelmed with work that managers kept notary stamps lying around for anyone to use. Bosses would often scream at each other in daily meetings for "files not moving fast enough," Tammie Lou Kapusta, the senior paralegal in charge of the operation, said in a deposition Sept. 22 for state law enforcement officials who are conducting a fraud investigation into the firm. In 2009 alone, Stern's law firm handled over 70,000 foreclosures.
"The girls would come out on the floor not knowing what they were doing," Kapusta said. "Mortgages would get placed in different files. They would get thrown out. There was just no real organization when it came to the original documents."
It's not just quantity that was the problem:
To keep up with the crush of foreclosures, document processors and mortgage service firms rushed to hire anyone they could - hair stylists, Wal-Mart clerks, assembly-line workers who made blinds - and gave them key roles in their foreclosure departments without formal training, according to court papers.
A number of these employees have testified that they did not really know what a mortgage was, couldn't define "affidavit," and knew they were lying when they signed documents related to foreclosures, according to depositions of 150 employees for mortgage companies taken by the law firm run by Ticktin, the Florida lawyer.
Picture that lady from the Amazing Race who thought London was a country processing your mortgage paperwork. In a hurry.
Ye gods.
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