"Robosigning"; another cute word for a really ugly problem

[the_archfiend]

Although listening to the entire Fresh Air interview with Gretchen Morgensen of the New York Times is important to understanding the full extent of the mortgage foreclosure mess, this is a snippet that should make anyone nervous:

Morgenson explains that for every mortgage, there are two pieces of paperwork necessary to complete the transaction: the note, which is the homeowner's promise to repay, and the mortgage, which is the lien on the property.

"Then the note and the mortgage are supposed to be in the loan file, so that if there is a foreclosure we understand that everybody knows that these are the right parties that are interacting here: the institution that has the right to foreclose and the borrower who has to deal with the foreclosure," she explains. "What has ended up happening is in the loan file, there's no note. The note's gone missing."

In other cases, she says, the dates on the paperwork necessary to foreclose come after the foreclosure proceedings — resulting in judges telling banks they don't have the right to foreclose on the property. In some cases, notarized signatures on the foreclosure documents are clearly forged — or signed in a completely different location, meaning the loan officer didn't look at the paperwork.

"It was all about expedience. It was all about speed," Morgenson says. "It's just a really sad commentary on the way the business was approached ... but this is exactly what the banks did when they were making the mortgages, so why are we surprised on the other end of it, that they're doing it again?"

Trust me: listening to the full 37-plus minutes of the piece is even more disturbing.