Mortgage servicer Ocwen recently settled $11 million in relief to settle foreclosure misconduct claims, and over $2 million of that settlement went to homeowners in Florida. While the win was a big one for people that had unfairly lost their homes in the past, it is a reminder that mortgage servicers do not always act honestly and in good faith.
In 2013, Ocwen also settled another matter that involved robo-signing, a practice that is illegal in South Florida and throughout the country. Robo-signing is rampant in the mortgage industry, and borrowers rarely know that it is taking place. So, what is robo-signing and how can you use it as a defense if you are in fear of losing your home?
What Is Robo-signing?
Robo-signing was one of the worst loan servicing abuses that came to light during the housing crisis of 2008. At the time, the mortgage servicing industry was often condemned by both the courts and the media for falsifying affidavits in thousands of foreclosure cases. While the practice is an illegal and dishonest one, it did provide many homeowners with defense in their foreclosure case. Robo-signing does not happen as much as it once did, but that does not mean it does not happen at all. If you are in fear of foreclosure, it is important to know what robo-signing entails, and if it was a part of your case.
In judicial foreclosure states, such as Florida, the lender foreclosing on the home must show that the homeowner did not pay their mortgage for a certain period of time, and that the bank has standing. To have standing means the lender owns the mortgage.
To prove these elements of their case, the lender must submit certain documents and a written statement signed under oath, known as an affidavit, must be signed by someone that typically works at the bank or a representative of the lender. The person that signs the affidavit must carefully review all of the paperwork associated with the loan, and they should have some personal reason for believing the facts within those documents to be true. The purpose is to prevent a foreclosure from occurring if the lender did not have standing or if the homeowner was not actually behind on their mortgage payments.
In 2010, many employees who worked for the big banks testified that they engaged in robo-signing practices. These employees did not fully review the documents presented to them and they had no knowledge that either the bank owned the loan, or that the homeowner was behind to the degree the foreclosure papers indicated. These employees stated that they spent approximately 30 seconds on each affidavit and that they could not confirm the facts being presented within the documents. It is because the affidavits are signed so quickly and without real review that those who sign them are known as ‘robo-signers.’
What Impact Do False Affidavits Have on Foreclosures?
In order to lawfully foreclose on a property, lenders must ensure the foreclosure paperwork is accurate and that it has been reviewed properly. If an affidavit, or another document associated with the foreclosure, is not correct, the foreclosure should not be allowed. Any document signed by a robo-signer could be considered incorrect because they do not have the time to fully review it and ensure that the documents they are attesting to are accurate.
Now that the practice of using robo-signers is so common, judges in South Florida are starting to take a closer look at the affidavits being submitted during a foreclosure case. Although at one time, judges mainly relied on the affidavit and automatically assumed them to be true, now a judge will look through the paperwork themselves more often to determine that everything is in order.
How to Challenge a Foreclosure Based on Faulty Affidavits
The robo-signing scandal cast a shadow on the integrity of the paperwork involved in a foreclosure case and today, the courts are much more likely to examine bank foreclosure affidavits and other documents. Judges are typically more willing to listen to claims from the homeowner that certain documentation is false or incorrect. Fortunately, due to the fact that Florida is a judicial foreclosure state, it is quite easy to challenge a foreclosure based on faulty affidavits.
In judicial foreclosure states such as Florida, in order to foreclose on your home, the lender or servicer must file a lawsuit against you and argue their case in court. It is at this point that you can raise the defense that a robo-signer was used in your foreclosure case and that the documents are not correct. How do you know that a robo-signer was used in your case? This is one way in which working with a South Florida foreclosure defense lawyer is of great help. A lawyer will know what to look for, and how to fight back against these practices.
Suspicious documents also provide borrowers more room for negotiating during the foreclosure process. If you can cast doubt on the paperwork being presented, the lender may be more motivated to help you through a mortgage modification or other defense instead of taking the matter to court.
Another way to challenge a foreclosure based on faulty affidavits is during a Chapter 13 bankruptcy. When going through a Chapter 13 bankruptcy in Florida, all creditors must file a claim in order to ensure they will receive payments according to the borrower’s Chapter 13 repayment plan. This applies to mortgage lenders, as well. If the lender cannot provide the necessary documents to prove the debt and the fact that it was reviewed under sworn testimony, the borrower can oppose the lender’s claim.
Call Our Foreclosure Defense Lawyers in South Florida Today
If you are in fear of losing your home, you may have more defenses available to you than you think. At Loan Lawyers, our South Florida foreclosure defense attorneys know the many defenses available and will use them to help ensure you can stay in your home. Call us today at 954-807-
1361 or fill out our online form to schedule a free consultation with one of our experienced attorneys.