Amid Nationwide Robo-Signing Settlement Talks, Massachusetts AG Files Sweeping Lawsuit Against Five Major Banks
Massachusetts Attorney General Martha Coakley has filed a “comprehensive” lawsuit against five national banks related to the “robo-signing” crisis, accusing them of violating Notary law and other misconduct related to thousands of improper foreclosures in the state.
The suit comes at a time when a group of other state Attorneys General are negotiating what could become a $20 billion nationwide settlement with a number of banks involved in the “robo-signing” scandal. The crisis has sparked many corporate boards to take a hard look at their risk management policies and consider improving the training and education of their Notary employees and supervisors to reduce liability exposure.
Among other things, the Massachusetts lawsuit charges the banks with “the pervasive use” of false documents notarized outside the presence of the signers to pursue foreclosures against thousands of homeowners.
“The suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law,” Coakley said in a statement. “Our action seeks real accountability for the banks illegal behavior and real relief for homeowners.”
Hinting that more charges and legal action may be in the offing, the suit also claims that evidence suggests such practices extended beyond the foreclosure process to include the creation, assignment and transfer of mortgages.
Other states also are moving to combat “robo-signing” practices. Nevada became the first state to bring a significant criminal case against several Notaries and their supervisors. Nevada and Michigan also have passed new laws imposing harsher penalties for improper conduct related to real estate and mortgage transactions.