Maine Attorney General Janet Mills has announced that her office has joined a coordinated national effort by state regulators and Attorneys General to investigate the practice of so-called “robo-signing” in the mortgage servicing industry. The Mortgage Foreclosure Multistate Group, comprised of state attorneys general in 50 states and state banking and mortgage regulators in 30 states, including Maine, will investigate whether individual mortgage servicers have improperly submitted documents in support of foreclosures.
Specifically, the group will look into whether companies misrepresented on affidavits and other documents that they reviewed and verified documentation supporting foreclosure actions. The group will also determine whether companies signed affidavits outside the presence of a notary public or committed other irregularities regarding residential mortgage foreclosures.
“This issue affects peoples’ homes, the stability of our families and our local economy and the integrity of our judicial system,” said Attorney General Mills. “This probe will be thorough, expeditious, and fair to all concerned.”
Submitting foreclosure documents without verification or with false representations, and/or signing certain legal documents outside the presence of a notary public may constitute deceptive acts and unfair practices and may violate other state laws and court rules.
Mills noted that at least three court decisions in Maine in the last two months found serious flaws with documents filed on behalf of mortgage servicers. Maine’s highest court ruled in August that Mortgage Electronic Registration Systems Inc. (MERS) is not a proper party to a foreclosure action. In addition, courts in both Maine and Florida have sanctioned GMAC Mortgage for inappropriate document signing practices.
Mills said these recent court rulings highlight the need for a broader investigation into foreclosure practices conducted in Maine by out of state servicers. Maine, like 22 other states, has a judicial foreclosure process for residential mortgages. Last year, the Maine Legislature enacted a foreclosure mediation process which requires proof of ownership of the mortgage and presence of a person with authority to mediate in good faith all aspects of a residential mortgage.
The new multistate group, through an executive committee, will contact a comprehensive list of individual mortgage servicers. The group’s initial objectives include:
►Put an immediate stop to improper mortgage foreclosure practices.
►Review past and present practices by mortgage servicers subject to the inquiry.
►Evaluate potential remedies for past practices and to deter future improper practices.
►Establish a mechanism for more effective independent monitoring of future mortgage foreclosure practices.
The Mortgage Foreclosure Multistate Group will consult with federal regulators and agencies, including the Mortgage Fraud Working Group of the Financial Fraud Enforcement Task Force (FFETF), which was created in 2009.
“This is a cooperative and coordinated effort to address a serious problem,” said Attorney General Mills. “The group may limit, expand or change its objectives, but it won’t stray from the goal of addressing a situation that has affected hundreds of thousands of homeowners.”
For more information, visit www.maine.gov.