Notary Bulletin

Companies Still Liable For 'Robo' Practices Even After Historic Settlement

Financial institutions and the third-party contractors that service loans are still liable for the improper notarization and document signing practices exposed by the “robo-signing” crisis, even after the $25 billion national mortgage settlement with federal agencies and 49 state attorneys general.

The most recent example is a lawsuit filed against loan servicing giant Nationwide Title Clearing, Inc., by Illinois Attorney General Lisa Madigan. The lawsuit accuses the Florida-based company of running a “document production factory” in which its employees improperly affixed the seals and signatures of Notary co-workers to foreclosure-related documents, signed and filed documents containing false information, and routinely signed documents on behalf of others.

Apart from the financial terms, the nationwide “robo” settlement creates a mandate for the banks to correct the widespread practice of routinely signing foreclosure-related documents outside the presence of a Notary Public. While the agreement resolves investigations against the banks that have accepted it, those institutions still could face stiff penalties of up to $5 million per incident for violating its terms.

The agreement also permits criminal cases — such as those filed in Nevada and Missouri — as well as civil actions brought by consumers to proceed. Many companies already are moving to improve the training and policies governing how their Notary employees and supervisors do their jobs.

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Quiz: The Many Types Of Notarial Acts

Notaries perform many different duties for the public — and it’s easy to lose track of the different acts and what states they’re authorized in. Test your familiarity with common — and uncommon — notarial acts.

(A link to the correct answers is provided at the end of the quiz.)

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