We've told you before about how big banks cut corners on paperwork over the last few years in order to speed struggling homeowners into foreclosure. And a "60 Minutes" report that aired last night offers fresh anecdotal reporting on just how irresponsible--and potentially fraudulent--the banks' practices were. Meanwhile, compelling video of a grandmother being evicted from her home by a SWAT team last week suggests the banks aren't slowing down their rush to foreclosure and eviction.
Banks profit by processing a vast number of homes into foreclosure as quickly as possible. But as "60 Minutes" details, many of the mortgages at issue were bundled and sold from one Wall Street investor to another during the housing boom, with scant attention paid among financial players to the actual underlying ownership documents. And as the foreclosures unwind in a slew of court proceedings nationwide, many banks have produced dubiously rendered legal documents that seek to shore up the ownership paperwork long after the original mortgage transactions were on the books. In some cases, financial institutions paid contract companies who employed an army of "robo-signers"—office workers who forged signatures on mortgage documents that were then used to initiate foreclosures.
You can watch the full 14-minute report here:
Scott Pelley of "60 Minutes" spoke with one former robo-signer, Chris Pendley, a man who had been paid to sign the name "Linda Green" thousands of times over the course of an average workday on mortgage documents.
"When you came in to Docx on your first day, what did they tell you your job was gonna be?" Pelley asked.
"They told me that I was gonna be signing documents for using someone else's name," Pendley remembered.
"Did you think there was something strange about that in the beginning?" Pelley asked.
Yeah, it seemed a little strange. But they told us and they repeatedly told us that everything was above board and it was legal," Pendley said.
Pendley told Pelley he had no previous experience in banking, in legal documents, and that there were no requirements for the job.
"You had to be able to hold a pen?" Pelley remarked.
"Hold a pen," he agreed.
Asked if he understood what these documents were, Pendley said, "Not really" . . . .
Pendley showed us how he signed mortgage documents as "Linda Green." He told us Docx employees had to sign at least 350 an hour. Pendley estimates that he alone did 4,000 a day.
There was an actual Linda Green, Pendley discovered, but she was no bank president either; she is a former shipping clerk for an auto parts store who was also hired on as a robo-signer at Docx. One plaintiff in a pending lawsuit discovered that Green is named as a vice president for 20 different banks in different mortgage documents, all bearing strikingly different renditions of her signature. She didn't agree to an on-camera interview, but she told Pelley that the company selected her name because it was short and easy to sign rapidly on the doctored ownership documents.
All 50 state attorneys general are currently conducting an investigation into the foreclosure mess--including cases that involve forged documents like these. And Shelia Bair, head of the Federal Deposit Insurance Corporation, told CBS she thinks the banks should have to pay billions to set up a compensation fund for those who are being forced to accept foreclosure without proper documentation.
But if you thought all this might have chilled the banks' zeal to push struggling borrowers from their homes, think again.
The footage below from a local news station shows Catherine Lennon, a grandmother from Rochester, New York being forcibly evicted from her home by a SWAT team.
Lennon has said that though she missed some mortgage payments after her husband died in 2008, she subsequently began making payments again. But because it was her husband's name, not hers, on the official mortgage documents, Fannie Mae wouldn't accept her money, and moved her house into foreclosure.
Federal lawmakers intervened, and Lennon may soon get her house back--she's been staying in a homeless shelter lately. But countless other Americans who are in similar positions may not be as lucky.
(AP Photo/David J. Phillip)