Notary Bulletin

'Robo' Foreclosure Settlement Includes Extensive Compliance Mandate, Leaves Door Open To Legal Action, Financial Liability

The historic, $25 billion “robo-signing” settlement requires mortgage servicers to implement “unprecedented” changes to protect consumers and to halt the widespread pattern of improper notarizations and document signings that sparked the foreclosure crisis. The settlement, announced on February 9, also leaves open the possibility of further civil penalties, lawsuits and criminal prosecutions.

Compliance with the agreement will be overseen by an independent monitor appointed by the government negotiators. Banks may be fined up $1 million per violation of the terms of the agreement, or up to $5 million for certain repeat violations.

The “robo-signing” crisis revolved around massive abuses of notarization, including failure to require personal appearance, forged signatures, lack of screening for awareness and misuse of Notary seals by non-Notaries, among other violations. As a result, many financial institutions are ensuring that their Notary employees and supervisors are trained in proper notarial procedure.

The Obama Administration and 49 state Attorneys General — excluding Oklahoma, which negotiated a separate agreement — are requiring the nation’s five largest mortgage servicers to ensure legal and ethical notarizations and foreclosure practices, implement training programs, and comply with Notary laws, among other vital terms. Those provisions extend to third-party vendors that perform various servicing functions, such as processing foreclosure filings.

At the same time, the settlement permits law enforcement agencies to pursue criminal cases related to “robo-signing” abuses, such as those filed in Nevada and Missouri. The banks also may have to defend themselves against consumer lawsuits over improper foreclosure document practices.

Professional Sections

NSA and Small Business
Healthcare Professionals
Legal Professionals
Financial and Corporate Services

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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