FREQUENTLY ASKED QUESTIONS ABOUT THE MORTGAGE MORATORIUM
By Steven Gourley| Q | What is all this talk about banks declaring a moratorium on foreclosing? |
| A: | Bank of America declared a moratorium on foreclosing on homes in ALL 50 states. Other banks have declared foreclosure moratoriums (moratoria?) in only 23 states. |
| Q | What does that mean? |
| A: | Bank of America and other banks will not foreclose on homes in states where they have declared a moratorium. |
| Q | Why would banks voluntarily stop foreclosing on homes? |
| A: | Homeowners have been claiming for years that many banks which are foreclosing on homes have no right to foreclose on homes because the banks were not able to show that they owned the mortgage or that the homeowner owed the bank any money. |
| Q | Then what happened? |
| A: | In some cases, judges let banks foreclose without providing any evidence of the mortgage or that the bank owned it. In other cases judges required banks to provide documentation proving that the bank owned the mortgage and had the right to foreclose. |
| Q | If the banks did NOT have the documents to prove that they owned the homeowners mortgage, how did they PROVE to the courts that the banks did own the mortgage and had the right to foreclose? |
| A: | Ah, that's where it becomes sticky. The banks created the documents out of thin air. (Lawyers call this "forgery.") Then the banks had the bank's employees file documents in the court that stated "under penalty of perjury" that these documents were real and should be relied on by the courts. (Lawyers call that "perjury.") |
| Q | What are "robo-signers?" |
| A: | Robo-signers are machines that sign the same form documents over and over again. Sometimes ten of thousands of documents were signed each day by the bank's "robo-signer" instead of by a real human being. A real human being might take too much time to sign the documents and cost the banks money. They might even hurt their wrists trying to write their names that many times a day. Therefore, the banks substituted "robo-signers" for real people. |
| Q | But weren't the bank employees supposed to read and review each document before signing? |
| A: | Yes. |
| Q | And, if robo-signers were signing the documents, then NO ONE was checking the documents to make sure they were real or accurate or true? |
| A: | Yes, again. |
| Q | So, when the robo-signing machine signed Mary Smith's name to the court document saying, essentially, that both Mary Smith and the robo-signing machine had read and reviewed the documents, both Mary Smith and the robo-signing machine were lying to the judges? |
| A: | That's right! |
| Q | So, when the banks declared a moratorium on certain homes loans because they "wanted to check their procedures," they were really saying: "We may have illegally robo-signed tens of thousands of people out of their homes using forgery and perjury, and we might be getting ready to do the same to hundreds of thousands more people?" |
| A: | Correct again! |
| Q | If the banks had recorded my mortgage with the County recorder, would they be having this problem? |
| A: | Probably not. |
| Q | Then why didn't the banks just record their mortgages with the county recorder? |
| A: | Good question. Be sure to see my second article: Why banks did not record their mortgages and then sold the mortgages to someone else who did not record the mortgage either." |
Steven Gourley has been an attorney for 32 years. He was formerly Chief Deputy Commissioner of Corporations and currently practices mortgage and securities law in Torrance.