Oct 20, 2010

dictionary-150[Note: updated on 2.16.2011]

What is a robo-signer?

Robo-signers are mortgage lending company employees who prepared and signed off on foreclosures without reviewing them, as the law requires. Jeffrey Stephan, the GMAC employee who was the first identified as a robo-signer, has acknowledged that he prepared 400 such foreclosures a day.

What's the significance?

If it turns out that robo-signers did indeed sign off on loans without review, they committed fraud by claiming knowledge of a financial matter of which they had no personal knowledge. It could also mean that some people are wrongly being evicted from their houses. All 50 state attorneys general are investigating the potential fraud, and for each time a robo-signer's signature appears on a loan the banks could be made to pay big in penalties. The unveiling of robo-signing has lead to "foreclosuregate" and the halting by some banks and states of the foreclosure process altogether.

Who's talking about it?

Mike Konczal almost feels bad for the robo-signing "patsy" taking the fall for banks' mistakes...The NYTimes profiles the first case to expose robo-signing in Maine...The Washington Post profiles Jeffrey Stephan, the original robo-signer...The Huffington Post unveils that many robo-signers were hair stylists and Walmart employees who had no knowledge of the mortgage process...A guest poster at Naked Capitalism explains why banks would use robo-signers...Consumerist notes a robo-signer confession that he didn't know anything about the loans...Robo-signing practices might start popping up in the credit card industry...Ally Bank has withdrawn all Maryland foreclosures authorized by Jeffrey Stephan.

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