Servicers in DOJ’s Crosshairs Following JPM Robo-Signing Settlement

Mortgage servicers were supposed to have stopped robo-signing foreclosure documents when state and federal authorities cracked down on the practice years ago, but it seems some have not learned their lesson.

While only JPMorgan Chase has been cited for recent robo-signing infractions, Clifford J. White 3rd, the head of a Justice program that oversees consumer bankruptcies, says he is seeing evidence of other servicers not following proper protocols when it comes to dealing with homeowners who have filed for bankruptcy. That could include not just robo-signing documents, but also failing to inform homeowners of mortgage payment increases or charging excessive loan-default fees.

Such abuses violate a 2012 settlement between law enforcement officials and the nation’s largest servicers and White is putting other servicers on notice that they too will be punished if they flout bankruptcy rules.

“Compared to where we were a few years ago, the banks are doing a better job,” said White, the director the Justice Department’s Office for U.S. Trustees. But, he added, “it is disappointing that, after all the years, [the problems]…are not completely rectified.”

Read on.

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