[8][9] "Robo-signing" is a term used by consumer advocates to describe the rubber-stamp process of mass production of false and forged execution of mortgage assignments, satisfactions, affidavits, and other legal documents related to mortgage foreclosures and legal matters being created by persons without knowledge of the facts being attested to.
[11][12] News outlets reported that on September 14, 2010, Jeffrey Stephan testified that he had signed affidavits which he hadn't actually reviewed on behalf of Ally Financial.
[14] In the fall of 2010, major U.S. lenders such as JP Morgan Chase,[15] Ally Financial (formerly known as GMAC), and Bank of America[16] suspended judicial and non-judicial foreclosures across the United States over the potentially fraudulent practice of robo-signing.
On September 21, 2010, HousingWire ran an article citing defects in affidavits used in some foreclosure cases at Ally Financial,[17] formerly known as GMAC Mortgage.
On July 18, 2011, the Associated Press and Reuters[18] released two reports that robo-signing continued to be a major problem in U.S. courtrooms across America.
State supreme courts in Maine, Arkansas, and Kansas have ruled against MERS right to file for foreclosures.
[21] For example, the Third District Court of Appeals in Florida ruled, in 2007, that "... it is apparent - and we so hold - that no substantive rights, obligations or defenses are affected by the use of the MERS device, [so] there is no reason why mere form should overcome the salutary substance of permitting the use of this commercially effective means of business.
[30] The same bill was later sponsored by U.S. Sen. Tom Carper (D-DE) and introduced in the U.S. Senate Judiciary Committee as S.2083 in 2007, but it ultimately stalled.
The bill was co-sponsored by Rep. Bruce Braley (D-IA), Rep. Mike Castle (R-DE) and Rep. Artur Davis (D-AL).
[32] But Leahy may have supported the bill after being lobbied by notaries at a September event in D.C. honoring President Calvin Coolidge.
[33] Sen. Robert Casey (D-PA), who was ushering through many pieces of last-minute legislation on behalf of the Democratic leadership on the final day before the Senate adjourned for recess, moved the bill from the Judiciary committee for a vote.
President Obama vetoed the bill on Oct. 8, following outcry from homeowner advocates and increased scrutiny from the press.
The consent order required that SunTrust follow the servicing standards set up by the 2012 National Mortgage Settlement (NMS) with the five largest banks.
The Consumer Financial Protection Bureau (CFPB), together with attorneys general and state banking regulators in 49 states, and the District of Columbia obtained a Consent Judgment requiring Ocwen Financial Corporation—who at the time, was the largest nonbank mortgage loan servicer in the country—and its subsidiary, Ocwen Loan Servicing, to provide $2 billion in first lien principal reduction to underwater borrowers.