Robo-signing practices date back to 1990s

Numerous large mortgage lending firms are under fire from state and federal officials for controversial mortgage practices that led to, and enhanced, the housing market collapse. One of the illegal practices being investigated is robo-signing, or the illegal signing or notarizing of housing paperwork by banks looking to save time and cut corners.

Originally thought to be contained to affidavits filed when a mortgage is given out and a house is purchased, robo-signing has recently been found in documents pertaining to the right to foreclosure by county officials in paperwork dating back to 1998, according to The Associated Press. Jeff Thigpen, the registrar of deeds in Guilford County, North Carolina, told the news source the illegal documents can have a huge impact on homeowners' deeds.

"Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them," Thigpen said.

In an interview with AP, Sheila Bair, the ex-chairwoman of the Federal Desposit Insurance Corporation, said regulators must force lenders to clean up the millions of documents that are suspected of robo-signing.

The American Banker recently reported after reviewing several documents, that as recently as this past August, banks including Bank of America, Wells Fargo and Ally Financial were backdating paperwork required to prove their right to foreclose on many properties. 

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