Besides seasonal slow down during holidays, there is another factor that will impact the title industry. Its a new law (going in effect on 01/14/2014)  that all lenders, servicers, trustees and title companies would have to comply with.

The CFPB amended Regulation Z, which implements the Truth in Lending Act (TILA). Regulation Z currently prohibits a creditor from making a higher-priced mortgage loan without regard to the consumer’s ability to repay the loan. The final rule implements sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which generally require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan) and establishes certain protections from liability under this requirement for “qualified mortgages.” The final rule also implements section 1414 of the Dodd-Frank Act, which limits prepayment penalties. Finally, the final rule requires creditors to retain evidence of compliance with the rule for three years after a covered loan is consummated.

This is a question from many borrower’s who at one point took out a mortgage. This is a question that many recorders can not answer today. This is a question that can cause many claims without paying appropriate attention. At the same time, this is a question that only a few in the title industry are privileged to know the answer to. If you are a homeowner trying to find out why you are paying your mortgage to someone who is called as Servicers of your loan, it may cost you $100,000.00 yearly subscription and plenty of training to answer this question yourself.

After the financial crisis in 2007-2008, most of the loans were securitized through Fannie Mae (Fannie) and Freddie MAC (Freddie). Fannie and Freddie, although operate as a government backed enterprise, maintain the course and methods of a private and publicly traded company, focused on bottom line. Fannie and Freddie are one of the last resorts for securitization market, continuing to securitize loans in REMIC trusts through today. We see many foreclosure actions were Freddie or Fannie become an owner after the foreclosure sale. In the few states, we see assignments executed into Freddie and Fannie. Well, this does not make complete sense to me, or at least this requires massive curative work, here is why!

A clerk, paralegal, attorney or title officer/agent signing the assignments of mortgages in volume - Is this a Robo-signing? Its hard to say. How do you go about proving that the signor on these documents is a Robo-signer. Besides presenting signature and position mismatch on varies assignments, as well as, notary mis-acknowlegdements, there is another more scientific way to demonstrate if a signer is a Robo-signed documents.

There are a number of new court cases where securitization issues are pointed out and Plaintiff’s standing is under heavy scrutiny. I will not explain the securitization theory in this blog, instead, offer a simplified view of the issue through the title search example. Let’s say the loan originated by Washington Mutual in 12/2006 (non-MERS loan) and the foreclosing party is “Bank of America in the capacity of Trustee for XYZ Mortgage Backed Securities Trust 2007-1”. Per county records, there is an assignment of mortgage from Washington Mutual to “Bank of America in the capacity of Trustee for XYZ Mortgage Backed Securities Trust 2007-1” recorded in 2012. On the surface, you would not see any issues with this assignment document; however looking deeper at the securitization of the loan we may find a number of inconsistencies or violations of securities law that are not a part of any checks by recorder or title examiner or notary.

Can Robo-signed documents be completely done in an Abobe Photoshop with scanned notary stamps and scanned signatures?

We are all used to the idea of robo-signing being a process of signing and notarizing a stack of documents in a single day without any review of its content, similar to DocX pipeline operation of signing mortgage related documents.

If we would only look at the efficiency of the signing pipeline (for now, bypassing legal aspects of signing the documents), there is a better cost effective way for signing and notarizing the documents. With the age of digital recording, the document has to be presented in the recordable format, which means that the document has to have all attributes for the recorder to record the document in the county records. These attributes are broken down in parts, just like a document itself can be sliced into multiple elements. Documents would consist of parts that are constantly repeated, such as, authorized signatures and notary stamps and notary signatures.