Modesto Bankruptcy Lawyer Blog

Here we are some 12 months after most major banks essentially halted their mortgage foreclosure procedures because of obvious signs of robo-signed documents and other inaccurate paperwork filed in order to strip Modesto homeowners of their houses and their legal rights.

And yet as a new report by Americanbanker.com shows banks are continuing to use robo-signed documents in mortgage foreclosure cases, even as the country's five largest banks are working on a settlement with 50 states because of the problems with foreclosure in Modesto and elsewhere.

It's outrageous that banks are continuing to rely on these shady practices in order to steal people's homes. They obviously haven't learned their lesson. An experienced and aggressive Modesto Bankruptcy Lawyer sees these problems, but also knows that the banks have a lot of power. The only true way to stop foreclosure is to file for bankruptcy in Modesto. This automatically stops a foreclosure in its tracks and allows the homeowner to work with the bankruptcy court to stay in their house or to find the solution that best protects the consumer.

According to the news article, reporters reviewed several dozen documents over a period of time. And the documents revealed that major banks, such as Bank of America, Wells Fargo, Ally Financial OneWest Financial are backdating paperwork that should have been signed and processed at the time of transaction.

Some documents, the website reports, showed signatures from bank employees that are supposed to represent lenders and companies that don't exist. And the documents were signed this year!

Robo-signed documents are essentially documentation signed by mortgage servicers -- companies hired by banks to help them process and file foreclosures with the court. While bank officials' names appear on these documents as if they signed them, they were actually signed by people who had no authority and no knowledge of the underlying case.

Further, many of these documents either contain incorrect information or have been signed after the fact. This kind of deceit continues to permit banks to run over struggling homeowners -- the very taxpayers than bailed these banks out of trouble at the height of the financial crisis.

The article goes on to say that banks argue that creating documents long after the fact -- in some cases going to back to 2005 or 2006 -- is routine. That it "memorializes" documents that should have been signed back then. When banks sell bundles of mortgages to investors, called securitizations, they are supposed to be delivered to a trust within 60 days of the closing date. And they are supposed to include all relevant documents, including the promissory note and other mortgage assignments showing transfers from one lender to another.

Yet many banks failed to properly document these transactions and many cannot prove who actually owns a Modesto homeowner's house. This is a key avenue for defending a foreclosure because the bank has the burden to prove such facts.

The report also discovered that some officials signed documents on behalf of companies that no longer exist while working for another company. Some bank officials have been signing documents on behalf of companies that did work years ago but are now defunct.

The whole process is a mess. And while attorneys can fight this process and attempt to help a homeowner stay in their home, it's no guarantee. It's obvious how powerful the banks are. They have done this for years and even after getting caught, they still continue to do it.

Filing for Chapter 7 Bankruptcy in Modesto, however, takes a different approach. Instead of trying to fight a foreclosure, bankruptcy stops foreclosure immediately. Creditors stop calling and hounding and banks can't take your home while the process is ongoing. It is designed to help people start over and that can include keeping them in their home despite financial struggles.