Mortgage paperwork mess: Next housing shock?

Scott Pelley reports how problems with mortgage documents are prompting lawsuits and could slow down the weak housing market

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Curious, she used her legal training to go online and research 10,000 mortgages.

"I often, because of my training, look for patterns. And then I began to find the strange signatures," she explained.

One of the strangest signatures belonged to the bank vice president who had signed Szymoniak's newly discovered mortgage documents. The name is Linda Green. But, on thousands of other mortgages, the style of Green's signature changed a lot.

And, even more remarkable, Szymoniak found Green was vice president of 20 banks - all at the same time.

Where did all those documents come from? We went searching for "the" Linda Green and found her in rural Georgia. She told us she has never been a bank vice president.

In 2003, she was a shipping clerk for auto parts when her grandson told her about a job at a company called Docx. The company, that was once housed in Alpharetta, Ga., was a sweatshop for forged mortgage documents.

"They were sitting in a room signing their name as fast as they possibly could to any kind of nonsense document that was put in front of them," Szymoniak said.

Docx, and companies like it, were recreating missing mortgage assignments for the banks and providing the legally required signatures of bank vice presidents and notaries. Linda Green says she was named a bank vice president by Docx because her name was short and easy to spell. As demand exploded, Docx needed more Linda Greens.

"So you're Linda Green?" Pelley asked Chris Pendley.

"Yeah, can't you tell?" Pendley, who is a man, replied.

Pendley worked at Docx at the same time and signed as Linda Green.

"When you came in to Docx on your first day, what did they tell you your job was gonna be?" Pelley asked.

"They told me that I was gonna be signing documents for using someone else's name," Pendley remembered.

"Did you think there was something strange about that in the beginning?" Pelley asked.

"Yeah, it seemed a little strange. But they told us and they repeatedly told us that everything was above board and it was legal," Pendley said.

Pendley told Pelley he had no previous experience in banking, in legal documents, and that there were no requirements for the job.

"You had to be able to hold a pen?" Pelley remarked.

"Hold a pen," he agreed.

Asked if he understood what these documents were, Pendley said, "Not really."

"But you were signing these documents as if you were an officer of the bank?" Pelley pointed out.

"Correct," Pendley said.

"How many banks were you vice president of in a given day?" Pelley asked.

"I would guess somewhere around five to six," Pendley said.

He was paid $10 an hour for this job.

Pendley showed us how he signed mortgage documents as "Linda Green." He told us Docx employees had to sign at least 350 an hour. Pendley estimates that he alone did 4,000 a day.

Shawanna Crite worked at Docx and was also a "Linda Green." She says she both signed and notarized the mortgage documents.

Asked what the role of the notary was, Crite said, "We were to make sure that everyone on the document was who they said they were and notarize the documents."

"But the people who were signing the documents weren't who they said they were," Pelley pointed out. "So if Chris Pendley was signing for Linda Green, you'd notarize that document."

"Yes," Crite said.

She told Pelley she was told that was okay.

"What do you know now?" Pelley asked.

"That it wasn't right," Crite said.

The real Linda Green didn't want to be interviewed. But she said that some of the bank vice presidents at Docx were high school kids. Their signatures were entered into evidence in untold thousands of foreclosure suits that sent families packing.