Foreclosure Crisis: 23 States Halt Foreclosure As Officials Review Bank Practices

Bank robo-signers allegedly reviewed thousands of foreclosures a week.

ByABC News
October 4, 2010, 6:52 PM

Oct. 4, 2010— -- As millions of Americans struggle under an epidemic of foreclosures, evidence has surfaced suggesting that some of the biggest banks are barely paying attention before signing documents that will push people out of their homes.

Officials at some big banks now admit that so-called "robo-signers" were signing off on thousands of foreclosures a day without actually looking at the details of any of the cases.

ABC News obtained a copy of multiple signatures attributed to a Florida lawyer moonlighting as a robo-signer. She had a day job in the Florida Attorney General's office, she somehow managed to vet some 150,000 mortgages in three years. If she worked every day of every year, that would amount to over 130 mortgages a day.

"It appears that most of the mortgage (companies) in fact did use robo-signers," said Mark Zandi, chief economist for Moody's Analytics. "It was a way to try to facilitate the process. They've been overwhelmed by the foreclosed properties, and this was their way of trying to get through those problems as fast as they could."

Concern about the process has prompted officials to halt foreclosure in many places across the country. Authorities have put the brakes of foreclosures in 23 states as they try to figure out if thousands of homeowners were unfairly booted out of their homes by the banks.

"The big banks have kind of become mortgage factories," said Dennis Ammann, president and CEO of the small Peoples Bank in Mendenhall, Miss. Ammann says that at his bank, foreclosure is an option of last resort.

"I think the larger your bank gets, the further out of touch it gets with its customers," Ammann said. "With community banks, you have a relationship with your bank and your banker."