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California Becomes Major Player in Foreclosure in Robo-Signing Settlement

September 30, 2011

Our Claremont foreclosure defense attorneys have written here many times about the ongoing "robo-signing" settlement talks. About a year ago, it came to public attention that banks were signing off on hundreds or even thousands of foreclosure documents without knowing whether those documents were true; the signatures often were written by someone other than the named person. The practice became known as "robo-signing" and it caused a scandal because it invited the very real possibility that the home would be wrongly foreclosed. Eventually, a group of state attorneys general emerged to negotiate a settlement with mortgage lenders, which housing rights advocates saw as a chance to correct wrongful foreclosure practices. The Los Angeles Times reported Sept. 23, California Attorney General Kamala Harris had emerged as a leader in these talks -- but on Sept. 30, it broke news that Harris had broken away from the talks due to dissatisfaction with mortgage lenders' offers.

California is the most populous state in the nation and among the hardest hit by the foreclosure crisis, which the Times said gives Harris a lot of leverage. It also said her involvement in any settlement would be important, and her dropping out of the group could be a major blow to the coalition's efforts. An anonymous source told the Times Harris stopped talks with the five largest mortgage lenders because she thought they were not offering sufficient relief for the suffering Californians have experienced in the foreclosure crisis, and because they wanted too much immunity from further prosecution. She may have been responding to political pressure from liberal groups that feel the proposed settlement is toothless. However, she followed the lead of several attorneys general who have already dropped out of the negotiations, including those of New York, Minnesota, Delaware, Nevada, Massachusetts and Kentucky. Several of these, including New York Attorney General Eric Schneiderman, have launched their own investigations.

As Santa Ana foreclosure defense lawyers, we're pleased to see that Harris is willing to create a disruption in order to serve Californians' needs. We share the concerns the article notes about whether the 50-state settlement will concede too much to mortgage lenders. As we've written here in the past, mortgage lenders essentially refuse to take responsibility for any wrongdoing. They claim that robo-signing practices are a technical problem that doesn't affect whether the underlying foreclosure is valid. This may or may not be true, but it's difficult to say because, in robo-signing, the lender abdicates its legal responsibility to ensure that the things it tells the court are true. And as observers of the foreclosure crisis know by now, it's extremely common for major lenders to have major paperwork errors. Thus, the only thing preventing a wrongful foreclosure is a judge's scrutiny -- and until robo-signing broke, judges saw these cases as routine.

At Howard Law, P.C., we represent Californians who are considering legal action to stop a preventable or unfair foreclosure. Many, many clients come to us after exhausting their administrative remedies and their patience with a loan servicer. That loan servicer often has given the client contradictory or untrue information, delayed responding to requests for months and months, or even denied a loan modification despite the homeowner's qualifications. Our San Diego County foreclosure defense attorneys believe servicers can and should do better, and we are prepared to hold them legally liable for violations of your rights or their obligations. It may be more profitable to shepherd borrowers into foreclosure, but when it's a violation of the law, we can take it to court.

If you're tired of calling your loan servicer over and over and hearing nothing but excuses while you march toward a foreclosure sale, call Howard Law instead. For a free, confidential case evaluation, send us an email or call 1-800-872-5925.

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