US banks are beefing up their mortgage departments in response to growing pressure and concern over the use of “robo-signers”, employees who rubber-stamped thousands of foreclosure documents without checking the accuracy of the information they contained, as required by law.
Recent job postings on Monster.com and other employment websites indicate that banks are recruiting “foreclosure specialists” and “bankruptcy documentation” experts. Adecco , the world’s largest temporary staffing company, said the number of such job openings was 25 per cent higher than a year ago. Monster.com says it has seen a 16 per cent rise in recruitment for such positions in the past two months.
Banks have been criticised for using robo-signers to push through thousands of foreclosure documents. According to sworn depositions, these employees were so overwhelmed by paperwork that they failed to verify basic information such as how much borrowers owed or how behind they were on payments, raising questions about whether these foreclosures were processed accurately.
The banks have denied that paperwork errors have resulted in improper foreclosures but investigations by the attorneys-general of all 50 states and by federal regulators are prompting the lenders to review their procedures.
“Any attempt that banks have made to automate the foreclosure process is now being set back and that means they will need to hire more people,” said Richard Bove of Rochdale Securities.
He estimates that big lenders will need to boost their foreclosure departments by 10-15 per cent to handle the record number of 6.7m distressed properties in the system.
GMAC is looking for “foreclosure specialists” who would be responsible for “ensuring procedural documentation is filed and completed in accordance with federal/state, investor/insurer and company requirements/guidelines”, according to job postings on Monster.com and employment site Hound.com.
GMAC set off the robo-signing crisis when it became the first lender to halt temporarily the sale of foreclosed properties while it reviewed its procedures.
A posting for a bankruptcy document preparation expert on the website of Everbank, a financial services company based in Jacksonville, Florida, describes a job opening: “Provide temporary relief to the document execution team. Access various systems and print out supporting documentation necessary for the signing officer to review, thus enabling them to attest to personal knowledge of loan status.”
GMAC declined to specify how many people it had added to its foreclosure review process, but said the majority had been redeployed from other areas within the bank.
Everbank said that all new employees are required to go through formal training and that on any given day it posts more than 100 job openings.
Most of these jobs are lower level and require no more than high school diploma, according to advertised listings. Mr. Bove said that banks have a good reason for not wanting to talk about their hiring plans. “Saying you are hiring is the same as admitting you have a problem,” he said.