October 13, 2010
• Posted in

Attorney General John Kroger and the Oregon Department of Consumer and Business Services today announced a multi-state investigation into whether affidavits and other documents have been improperly used as part of the foreclosure process.

“It’s crucial that we find out whether Oregonians are losing their homes based on improper foreclosures,” said Keith Dubanevich, Chief of Staff and Special Counsel to Attorney General Kroger. “And if wrongdoing is discovered, we need to put a stop to it.”

It has recently come to light that a number of mortgage loan servicers have improperly submitted affidavits or improperly signed other documents in support of either a judicial or non-judicial foreclosure. In particular, it appears affidavits and other documents have been signed by persons who did not have personal knowledge of the facts asserted in the documents. In addition, it appears that many affidavits were signed outside of the presence of a notary public, contrary to state law. This process of signing documents without confirming their accuracy has come to be known as “robo-signing.”

Such a process may constitute a deceptive act and/or an unfair practice or otherwise violate state laws.

Oregon is not a judicial foreclosure state, which means that a court does not approve a lender’s decision to foreclose on a home. As a consequence, the affidavits that have come under fire in other states as being false are not used here in Oregon. However, in 2009 the Legislature passed SB 628, which requires lenders to tell homeowners that they have certain basic rights, including a right to request a loan modification and a right to meet with their lender, before a foreclosure sale can occur. It also requires the lender file an affidavit in support of the foreclosure. In 2010, the Legislature strengthened those protections (SB 3610) by requiring that the affidavit be filed at least 5 days in advance and that the lender provide an explanation if the loan modification doesn’t qualify, among other things.

Compliance with SB 628 and SB 3610 (Codified as Oregon Revised Statutes 86.737) will be a special focus for the Oregon Department of Justice and the Department of Consumer and Business Services as part of the multi-state investigation.

Attorney General Kroger created a mortgage fraud task force that has been closely monitoring foreclosure activity.  The Task Force has obtained multiple civil settlements banning from Oregon out-of-state loan modifiers who violated Oregon law as well as criminal convictions.

The multi-state group includes state attorneys general and state bank and mortgage regulators.

Attorney General John Kroger leads the Oregon Department of Justice. The Department’s mission is to fight crime and fraud, protect the environment, improve child welfare, promote a positive business climate, and defend the rights of all Oregonians.

The Department of Consumer and Business Services regulates banks and mortgage lenders through its Division of Finance and Corporate Securities. The department’s mission is to protect and serve Oregon’s consumers and workers while supporting a positive business climate in the state.


Tony Green, (503) 378-6002 tony.green@doj.state.or.us |