Financial institutions and the third-party contractors that service loans are still liable for the improper notarization and document signing practices exposed by the “robo-signing” crisis, even after the $25 billion national mortgage settlement with federal agencies and 49 state attorneys general.
The most recent example is a lawsuit filed against loan servicing giant Nationwide Title Clearing, Inc., by Illinois Attorney General Lisa Madigan. The lawsuit accuses the Florida-based company of running a “document production factory” in which its employees improperly affixed the seals and signatures of Notary co-workers to foreclosure-related documents, signed and filed documents containing false information, and routinely signed documents on behalf of others.
Apart from the financial terms, the nationwide “robo”
settlement creates a mandate for the banks to correct the widespread practice of routinely signing foreclosure-related documents outside the presence of a Notary Public. While the agreement resolves investigations against the banks that have accepted it, those institutions still could face stiff penalties of up to $5 million per incident for violating its terms.
The agreement also permits criminal cases — such as those filed in Nevada and Missouri — as well as civil actions brought by consumers to proceed. Many companies already are moving to improve the training and policies governing how their Notary employees and supervisors do their jobs.
