ROBO SIGNING AND BAD BEHAVIOR BY PLAINTIFFS AND THEIR ATTORNEYS IN FORECLOSING RESIDENTIAL MORTGAGES REDUX

Like the “bad seed” or the “very spicy taco,” the ROBO signing scandal keeps raising its ugly head or, for the mortgage servicers and their attorneys, keeps producing news headlines and stories, and queasy stomachs. The latest is the story of the two crusading lawyers who were working at Florida Attorney General, Pam Bondi’s office, who undertook an investigation of the company, Lender Processing Services (LPS) where mortgage servicers outsource default activities to, and apparently were up to their necks in ROBO signing issues.

June Clarkson and Teresa Edwards were Assistant Attorney Generals in Florida conducting an investigation of LPS and had apparently progressed in their investigation to the point where it appeared to them that LPS was involved in the practice of signing, improperly, “thousands of mortgage documents.”

The problem documents and the questionable signings were the subject of an oral presentation given in December of 2010 by Ms. Clarkson to the Association of Court Clerks in Florida. Apparently, LPS took umbrage, and an attorney for the company sent a nasty letter castigating Ms. Clarkson and Ms. Edwards’ characterization of LPS practices regarding signatures as forgeries. This occurred in January of 2011, and these two women received further criticism from within the Attorney General’s Office. Then on May 20, 2011, Ms. Clarkson and Ms. Edwards were forced to resign as Assistant Attorney Generals. Significantly, on January 6, 2012, the Office of the Inspector General of the Florida Department of Financial Services issued its “Report of Inquiry Number 12312,” in which it recounted its investigation of this forced termination. Their conclusion was that nothing wrong occurred. The 85-page report, however, makes a very interesting read. I read it, and my understanding is that their conclusion was based upon the fact that since these two were “at-will” employees who could be terminated without cause and that Ms. Bondi’s office is continuing to investigate the “foreclosure mill cases.” I guess we can expect to see some of these investigations brought to fruition and action taken; we are waiting.

If you want to read more about this, there is an interesting article published in the Miami New Times by Stefan Kamph, “Florida Protects Banking Giant Lender Processing Services, Ignores Hurting Homeowners” published on June 21, 2012 (www.miaminewtimes.com) and a much earlier article in the Palm Beach Post with the interesting title “Is Signing Foreclosure Documents for Others Forgery?” published on January 14, 2012 (www.palmbeachpost.com). Or you could just go on the internet and type in “Clarkson and Edwards Law Firm” on Google and you will get enough reading for a rainy Sunday afternoon.

My takeaway from this, in my capacity as a lawyer representing homeowners in mortgage foreclosure cases, is that one should scrutinize and challenge, at every opportunity, the bona fides of every document signed by a bank representative including; Affidavits in Support of Summary Judgment, Mortgage Assignments, Assignments of Notes, or any other document which appears to have been prepared in connection with a mortgage foreclosure. I would also, if the opportunity presents itself, point out to a court, which might not share my cynicism, that it can take judicial notice when it happens, (and it happens a lot) and the court cannot rely upon law enforcement, or the regulators, to put a stop to it or to bring the bad actors to justice.