Econintersect: Robo-signing is the process of lining up documents to be signed one after the other with no examination by the signer. It was a practice that was used to sign masses of documents in the mortgage processing back rooms during the height of the housing bubble. The process may have been robotic but there were real people actually moving the pens and leaving ink marks on the paper. Now a report from Deadly Clear and Naked Capitalism says that there is another group of American jobs lost to automation: Robots are now signing mortgage documents.
Here is an excerpt from Deadly Clear‘s article:
Never let it be said that where there is big money invested, there won’t be crooks in the kitchen. It doesn’t matter how big you are there’s always a short cut that can that can potentially create more wealth – if you don’t get caught.
An investigator in the northwest uncovered just such a scam – so big that authorities claim it needs multi-state attention. It appears Green Tree Servicing has been flying under the radar and was hardly noticed until a recordation research team began uncovering similarly signed documents – yup, the old robo-signed Assignment of Mortgage trickery again… but this time new and improved via computer, maybe for speed and precision, ya think?
Naked Capitalism maintains that this is the sort of thing to be expected as a result of the slap on the wrist mortgage settlement that was agreed to by 26 states and the U.S. Department of Justice last year. If there are not substantial penalties applied, the perpetrators will continue pushing the envelope of fraud further and further. Here is an excerpt from Naked Capitalism:
Now cynics will correctly point out that Green Tree is a small operator. But that misses the point. Real estate was once a slow, deliberate business precisely because the integrity of property records is an important bulwark of capitalism (cue Hernando De Soto) and housing is most families’ most important asset. As Barry Ritholtz pointed out early in the robosigning scandal, this should be a zero fault business. It used to be that way (ex well constructed, typically local frauds) and the fact that, again and again, the banks have been both given a free pass and not required to clean up their bad practices, is the worst of all possible outcomes.
Sources: Linked in the article.