Foreclosures: More Evidence of Bogus Paperwork

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Foreclosure documents show three different signatures for "Linda Green," who's identified as the vice president of several different lenders. From the CBS Evening News, Oct. 28, 2010.
CBS

More and more Americans are losing their homes to foreclosure. About 2.6 million have been repossessed since the recession began. Between January and September more than 800,000 homes were seized.

If that pace continues, more than 1,000,000 homes will be repossessed this year, a record. CBS News correspondent John Blackstone reports the crisis is now affecting every area of the country.

In Chicago, eviction notices are being posted more often, up 35 percent over last year. It happened to the yellow bungalow in the suburbs where Beth Mackay and her family lived for seven years.

"It was a grieving process that was a lengthy one and still continues," she says.

America's foreclosure crisis is spreading far from the states like Florida and California where it began. In the Seattle area foreclosures are up 71 percent this year.

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"The foreclosure numbers in Seattle continue to rise month after month even in our peak selling season which here can be spring or fall," says Seattle real estate broker Matt Parker.

Now there's more evidence of just how blatantly the paperwork for that flood of foreclosures has been mishandled. Consider this: a stack of legal documents used to seize homes that don't even identify the lender claiming to hold the mortgage.

Instead the words "bogus assignee" fill the space where the lender's name should be. In foreclosure after foreclosure, the lender's address is listed only as x's, such as xxxxxxx. In some cases the documents identify the lender as "bad bene."

"They have foreclosed in the name of 'bad bene,' for bad beneficiary," says attorney Robert Hager.

Hager, who represents homeowners fighting foreclosure, says the paperwork also appears to bear bogus signatures.

"This is how arrogant they are with regard to taking homes," he says.

The documents are signed by Linda Green but her signature changes dramatically from document to document and she's identified as the vice president of several different lenders.

Now state and federal investigators are looking at the company behind the bogus assignees, Lender Processing Services. LPS, which handles mortgage documentation for the 50 biggest banks, blames a small subsidiary for the flawed documents and says they've all been fixed.

For those like Beth Mackay who have lost their homes during the paperwork mess, questions of fairness and due process remain.

"It's painful to think about," she says.

  • John Blackstone
    John Blackstone

    From his base in San Francisco, CBS News correspondent John Blackstone covers breaking stories throughout the West. That often means he is on the scene of wildfires, earthquakes, floods, hurricanes and rumbling volcanoes. He also reports on the high-tech industry in Silicon Valley and on social and economic trends that frequently begin in the West.