Federal regulators simply aren’t that interested in investigating foreclosure fraud and laying down the appropriate punishments. Tom Miller is too busy deflecting criticism about massive campaign contributions from the banking sector to run a proper state-based investigation. So it’s actually come down to the registers of deeds – the unassuming public servants working in county recorder’s offices across the country and carefully recording the transfers of land titles – to step up and deliver some measure of accountability on the banks for violations of law. So far, precious few registers of deeds have taken on this seemingly impossible task. But Jeff Thigpen in Guilford County, a county of about 465,000 in the center of North Carolina (the biggest city is Greensboro), has delivered the goods.
Thousands of mortgage documents in Guilford County could potentially be fraudulent, the county’s register of deeds said.
Jeff Thigpen said his office noticed signature discrepancies in more than 4,500 mortgage and foreclosure documents submitted between August 2006 and April 2010. While the same name was signed to documents, the signature characteristics were found to be different, Thigpen said.
I was left infuriated, rooted in what I believe is a betrayal of public trust,” Thigpen said.
The signatures were produced in companies Thigpen calls “mortgage mills,” which banks use to speed up the processes of selling, extending loans and charging more fees.
Thigpen basically followed the investigation undertaken by 60 Minutes; in fact, Lynn Szymoniak, the forgery and document fraud expert featured in that article, appeared with Thigpen in his press conference on this. She’s tried to get practically every regulator in the country to listen to her about this massive fraud perpetrated on state courts. Thigpen is listening.
Thigpen simply went through all the documents submitted to his office by DocX, the mortgage mill company, over a four-year period. He got 6,100 documents, and 4,500 had signature irregularities, where the name was the same but the signature didn’t match on individual documents. These forgeries were commonplace throughout the past several years and nobody wants to own up to it.
Wells Fargo processed 54% of the documents and Bank of America processed 15%. The inclusion of those two big banks in the study got the attention of Bloomberg.
Thigpen basically sees the catastrophe ahead, if mortgage assignments are fraudulent and people trying to sell their homes encounter problems related to title. His data is arguably more robust than anything put out by the overlapping state or federal investigations.
If this takes off, registers of deeds around the country could do these investigations with their existing documents in their offices. In Ingham County, Michigan, another register of deeds is making noise:
Ingham County Register of Deeds Curtis Hertel Jr. asked state lawmakers Wednesday to address a tide of fraudulent foreclosure documents he believes are forcing many out of their homes in mid-Michigan and nationwide.
Speaking to the House Banking and Financial Services Committee, Hertel called for legislation that would expand the title information and mortgage history needed when a bank files for foreclosure – as well as create a review board for homeowners to appeal foreclosures.
Currently, banks can initiate foreclosures with a one-page document filed with the Register of Deeds. A homeowner who wishes to contest a foreclosure must hire an attorney to seek a court injunction.
“Homeowners certainly have the right to know that their house is being foreclosed properly,” Hertel said. “Under Michigan law, we have no checks and balances in the system.”
The implications are profound. First, you have the banking industry destroying the land title system in the country which has lasted for hundreds of years and is arguably a major basis for civil society. Second, you have the spectacle of MERS, the system which pretty much led to all these document forgeries. MERS allowed banks to bypass county recorder’s offices – and the fees for transfers of mortgage – but the legality of the enterprise is in serious question. A recent ruling in Michigan affirmed that MERS has no standing to foreclose, which has led to the stoppage of closings on some bank-owned homes, because the title insurance companies found them too risky. The bigger issue is that registers of deeds could sue MERS for back fees relating to multiple transfers of mortgages. That windfall could run into the billions of dollars.
Who knew that it would be the registers of deeds who would play a role in saving the rule of law in this country?