“Robosigning” is a term created and popularized in light of the recent scandals involving the mortgage foreclosure crisis. As a new term, it does not have an official legal definition, but refers to the process of “mass signing” forged or fraudulent documents relating to mortgage foreclosure. Notaries have been involved in robosigning by acknowledging the robosigned documents and signatures before or after they are actually signed.
Some specific examples of robosigning include situations in which:
– a person who has authority signs a document but fails to verify information
– a person who does not have authority forges the signature of one who does
– a person pretends to have authority but does not
– a person signs documents but does not have them properly notarized
The National Mortgage Settlement and California Homeowner Bill of Rights are in part based upon the problems created by many robosigned documents. The National Mortgage Settlement provides cash payments to many homeowners who were foreclosed upon by certain banks on certain dates with robosigned documents. The California Homeowner Bill of Rights furthers the protection by allowing for fines and penalties to be imposed upon any bank that participates in robosigning. While the Homeowner Bill of Rights is not retroactive, homeowners who have been negatively affected by robosigning can rely on case law to receive protection and relief from the courts.
In Dimock v. Emerald Properties, the homeowner was quieted title after the court noted that the original trustee conducted a foreclosure sale after substituting another trustee. While robosigning was not technically involved in this case, it set the stage for other cases in which the wrong trustee tried to conduct a foreclosure sale based on robosigned documents.
For example, in Tang v. Bank of America, homeowners argued that the foreclosure documents were robosigned because the substitution of trustee was signed by a person who lacked the proper agency relationship with the bank. The defendant bank argued that the case should be dismissed but the court held that it should be heard since the claims of robosigning were plausible.
Again, in Michel v. Duetsche Bank Trust Co., homeowners brought suit against a number of defendants involved in the foreclosure of their home. One claim brought was against the improper (robosigned) signing of a substitution of trustee. The court noted that if the substitution of trustee was invalid, then the trustee had no authority to conduct a sale. Thus, if robosigned documents are involved in any mortgage foreclosure, homeowners have legal rights regarding the harm they suffered from these wrongful foreclosures.
With so many questions of fraud, many notaries are being asked to produce their log books for examination as to whether foreclosure documents were properly executed and/or notarized. California Government Code Section 8206 sets forth many requirements for the keeping of a notary journal. Notaries must properly record dates, documents, identities of signers and more. They must also produce their notary journal for examination if the notary receives a subpoena or court order. This is a powerful tool for protecting homeowners’ rights.