BofA, Wells Fargo Mortgage Papers Challenged in North Carolina
Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC), lenders already being probed for faulty home foreclosure practices, were accused by a county official in North Carolina of using mortgage documents that were possibly forgeries.
The signatures of the same names on more than 4,500 documents handled by Lender Processing Services Inc. (LPS) for real estate valued at $624.8 million varied enough to raise doubts about their validity, Jeff Thigpen, register of deeds in Guilford County, North Carolina, told reporters today in Greensboro.
Most of the documents were certificates of satisfaction filed on behalf of San Francisco-based Wells Fargo, Bank of America, based in Charlotte, North Carolina, and other institutions showing the payoff of home mortgages, he said. Thigpen said defective documents may harm a person’s ability to get a loan if there are doubts about the legitimacy of the paperwork discharging a previous mortgage.
“Investigators need to look at all of this, including the possibility of forgery,” Thigpen said in an interview. “I don’t know if the people who signed the documents were authorized to sign the documents or if they were who said they said were. It is all very questionable.”
Thigpen’s allegations, covering paperwork from 2008 through 2010, follows complaints that banks relied on so-called robosigners, who allegedly processed and signed foreclosure documents without verifying the facts of the cases.
‘No Risk’
Jason Menke, a Wells Fargo spokesman, said the bank’s practices regarding certificates of satisfaction are “appropriate and pose no risk or harm to homeowners in the Carolinas or anywhere else.”
Michelle Kersch, a spokeswoman for Lender Processing Services, said by e-mail that when the company learned of improper signing practices at its subsidiary Docx in November 2009 the process was halted, clients notified and the unit ultimately shut down.
“The signing procedures at Docx were not consistent with LPS’s policies and practices nor were they approved of by LPS’s senior management,” she said.
Jumana Bauwens, a spokeswoman for Bank of America, didn’t respond to an e-mail and phone call seeking comment.
“There are 4,000 people here who may have paid off their loans but we don’t know because the paperwork is bad,” said Thigpen, 40, the register since 2004. “That is the ticking time bomb. Somebody somewhere who has authority for this has got to fix it.”
Thigpen said he will send his office’s findings to the Federal Reserve, the Federal Deposit Insurance Corp. and other federal regulators. He also plans to ask lenders including Bank of America and Wells Fargo as well as Merscorp Inc., which runs an electronic registry of mortgages, to submit documents to correct defective paperwork.
Karmela Lejarde, a spokeswoman for Merscorp, declined to comment.
Thigpen said he’ll also ask a group of attorneys general that are leading a 50-state probe into foreclosure and mortgage- servicing practices to investigate the matter.
The Guilford County investigation represents “the very first time we have actual findings,” said Lynn Szymoniak, an attorney in West Palm Beach, Florida, who has represented homeowners in document cases.
“We have plenty of people doing investigations,” Szymoniak said. “But we never see data come out of these investigations. This is a blueprint for other offices all around the country,” she said.
The attorneys general and federal agencies, including the Justice Department, are negotiating a settlement with five banks that are the top mortgage servicers in the U.S. The banks are Bank of America, Wells Fargo, JPMorgan Chase & Co., Citigroup Inc. and Ally Financial Inc.
To contact the reporters on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net; Chris Burritt in Greensboro at cburritt@bloomberg.net.
To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Robin Ajello at rajello@bloomberg.net.
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