(US, VA) 2008/9 Financial Crisis Wrongful Foreclosure

I know you are well-intentioned, but to keep insisting your parents' problems are the results of robo-signing because someone overstated their income on a mortgage application somewhere along the line is not going to help mom at all. In fact, you are beginning to look like a fool here by insisting this is the case because:

  1. The robo-signing scandal did not involve any paperwork completed during the application process. The robo-signing involved paperwork the banks needed to file with various courts and government agencies to comply with foreclosure regulations.

  2. The issue you are describing, that your parents at some point signed an application which overstated their income, is not robo-signing because no one on the lender's side signs the application, only the consumer does. You can't hold someone responsible for robo-signing paperwork they didn't and weren't supposed to sign in the first place.

IANAL but am someone who did a fair amount of fraud research for various agencies during this scandal. And it seems to me that perhaps, and this is only a perhaps, there are two possible issues that you may want to research further to see if your mom is due compensation:

  1. I posted a link to a CNN article earlier which detailed the negotiated settlement for the robo-signing scandal. Once you've finished researching the mortgage notes your parents signed, you should be able to tell which lender held the loan transferred to BoA. If that lender was part of the robo-signing scandal then you might want to further research if claims for compensation are still being reviewed. Note that this robo-signing has nothing to do with the issue you have brought up here, it just means that these lenders sometimes filed robo-signed documents with the court. You just might get lucky here that their pre-BoA lender was part of this scandal although from reading the article it appears that compensation is limited to "up to $2K". There are other conditions to qualify for these funds, such as the loan was not sold to FNMA or FREDDIEMAC but first things first, find out who initially held the loan.

  2. If you insist that the lender and not your parents overstated their income on an application then this is income fraud. The difficulty here is that your parents signed the application. In the cases I have seen pursued for income fraud, there is usually more evidence than he said/she said kind of thing. There would be falsified income employer verification forms, falsified tax forms, falsified paystubs, etc. Which is why I asked the type of loan. No Doc loans required, as the name suggests, no income documentation which leaves you with only the he said/she said scenario and considering one party is deceased and the originator has likely moved on, would make this near impossible for you to prove since your parents signatures are on the document. But if this was a conventional loan where full documentation was required, then you'll need to get your hands on that verification paperwork to see who/how that was falsified.

/r/legaladvice Thread