Robosigning Confirmed at Chase, BofA

Federal investigators confirmed that five of the largest U.S. banks did not follow mortgage requirements in the first years of the financial crisis. CitiMortgage, Ally Financial, JPMorgan Chase, Bank of America and Wells Fargo were all subjects of a Department of Housing and Urban Development audit after accusations of improper activity surfaced at many of the banks in late 2010. The audits show that workers processed extraordinary levels of paperwork without checking that the data in the documents was correct. National concern over mortgage signing practices prompted the audits; some of the most extensive to date, and a $25 billion mortgage servicing settlement was filed yesterday between the banks and the federal government. Some Wells Fargo employees were found to be unqualified for the empty titles they were given so they could sign documents, with no additional tasks. JPMorgan Chase also gave employees permission to sign mortgage documents with titles that were not theirs. A Bank of America employee testified that “daily volume went from 60 to 200 documents per day to 20,000 documents per day with half being duplicates. One former employee described signing 12- to 18-inch stacks of documents at a time without review,” according to the HUD audit. Prior to 2009 CitiMortgage did not have written policies and procedures for the mortgage signing process. Documents were only reviewed for completeness, not accuracy, a complaint heard about many of the other banks as well, according to the HUD audits. CitiMortgage also used law firms that may have used questionable processes for dealing with foreclosures. Many of the banks also were reported to have the foreclosure documents authorized by notary public who were not present when the document was originally signed. Mortgage signers at Ally were found to have certified that they had personal knowledge of the mortgage documents they were signing without reviewing supporting documents. The audits referenced at “flawed control environment” at all of the banks allowing improperly certified documents to become official.