Linda Green | Robo-signing Signing Scandal Hits Allen County Recorder John McGauley, Thousands of Suspect Documents, Including His Own

Signing scandal hitting home

Dubious names affect verification of deeds

FORT WAYNE – Allen County Recorder John McGauley knew property documents with suspect signatures were prevalent. After all, there were so many that a year ago the nation’s largest banks had to halt foreclosures to deal with the sea of paperwork that could not be trusted.

The problem was so big it spawned a new word to describe it: “robo-signing,” meaning offices filled with low-paid workers signing documents they had never read, documents they were not qualified to sign and often signing someone else’s name.

Still, McGauley was surprised to hear that robo-signing was not limited to foreclosure documents but was being found on thousands of homeownership documents having nothing to do with seized homes.

He was even more surprised when a quick check of Allen County records revealed more than 8,000 suspect documents have been filed here since 2006 – records McGauley’s office is charged with preserving as the final word in property ownership.

“It was just like reaching into a hat where your number was on more slips of paper than it wasn’t on,” McGauley said. “Everything you pulled out was another one.”

But the real surprise was when McGauley looked through the documents for his own home. The mortgage release on the house he and his wife sold in 2005 bears the signature of Linda Green – the most notorious robo-signer in the nation.

“This is the kind of thing that can really upset people because the biggest investment most people will ever make is their home,” McGauley said. “It’s frustrating me.”

It could be frustrating millions soon and frustrating an already-battered real estate market.

If invalid documents are discovered in the chain of ownership, it could delay a home sale or make it difficult for buyers to get a mortgage because title insurers will not write a policy for the property, said Justin Ailes, vice president of government affairs of the American Land Title Association, which represents the title insurance industry.

Banks and other mortgage lenders will not write a home loan without title insurance.

That means your house – even if you’ve never missed a payment or had an ownership dispute – could be impossible to sell until the documents are verified, or it could be impossible to buy your dream home.

“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,” said Jeff Thigpen, the registrar of deeds in Guilford County, N.C.

In Guilford County, home to Greensboro, a sample of 6,100 mortgage documents filed since 2006 turned up 74 percent with questionable signatures.

Who is Linda Green?

In the late 1990s and early 2000s, a new industry emerged: buying and selling mortgages. Eventually, the practice – doomed by profiteers unconcerned with whether the mortgages would be paid – collapsed some of the biggest banks in the country and wrecked the economy.

Until then, however, banks struggled to deal with the avalanche of paperwork property transactions require, and they turned to document processors.

As home loans were packaged into securities on Wall Street and sold to global investors, demand skyrocketed and lenders and mortgage processing firms hired entry-level employees to sign hundreds of mortgage documents a day.

Sometimes they forged the signatures of executives who were qualified to sign. Other times, actual executives signed the documents without verifying their accuracy. Many of the documents were stamped by notaries even though the people who had signed the documents weren’t present when the papers were notarized, a requirement by law.

All are instances of robo-signing and are potentially illegal. Regardless of whether the actions were criminal, it makes the documents suspect.

Fidlar Technologies provides the software for recorder offices or their equivalent in 225 counties across 15 states, including Allen County. When Fidlar employees were here recently for a training session, they searched the recorder’s office database for documents handled by the country’s two largest document processors – Nationwide Title Clearing of Palm Harbor, Fla., and DocX of Alpharetta, Ga. – and found 8,183 recorded since Jan. 1, 2006.

That’s about two of every 100 documents filed in Allen County in that time period.

“There’s other (firms) suspected of robo-signing, but these two are the most egregious,” said Scott Moore, vice president of sales and marketing for Fidlar Technologies. “The idea (for the search) was just to get an idea of what’s in there.”

What was in there was ugly: Documents where the signer claims to be the vice president of one bank, only to sign as the vice president of another bank the very next day and of a third just days later; signatures that clearly do not match; one signer that claimed to be the vice president of eight different banks in four months’ time; and all of them handled by the two companies most implicated in the robo-signing scandal.

Among the signatures was many for “Linda Green,” who was an employee of DocX.

“60 Minutes” reported in April that the real Linda Green signed documents as the vice president of 20 different banks, though she had never been a vice president at any bank, and that other DocX employees also signed Linda Green’s name to documents because her name was short and easy to spell. They admitted they notarized documents even when they knew the signatures were forgeries. The workers were under pressure to sign as many documents as fast as they could, up to 350 an hour.

The last document with Linda Green’s signature filed in Allen County was recorded in November 2009. DocX was shut down in February 2010, and officials say they do not believe Green has worked in the industry since. But the office that handles property deeds in Essex County, Mass., has received almost 1,300 documents since October 2010 with “Linda Green” signatures; but the signature appears in 22 different handwriting styles.

Nationwide Title Clearing documents were still being filed here in July of this year. It wasn’t until September that Goldman Sachs and two other firms agreed to stop robo-signing.

It was first thought the robo-signed documents involved only properties in foreclosure, as banks cut corners trying to deal with the flood of homes they were seizing. But an investigation by The Associated Press shows robo-signed documents appear on all types of mortgage documents dating to 1998, including documents signed with the same name by dozens of different people or signed without a review of the facts in the paperwork.

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