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Attorney General's News Release

March 8, 2011

Koster says settlement with banks over robo-signing should include mortgage mitigation for homeowners

Jefferson City, Mo. – As serious discussions between the banking industry and the 50-state multigroup get underway in Washington, Attorney General Chris Koster said today that any settlement with the nation’s large banks should include substantial mortgage loss mitigation measures. Koster also said he is pleased that the fifty-state investigation into violations of law related to “robo-signing” has developed into a broad effort to stabilize the housing mortgage market.

“I believe the efforts of the fifty-state working group will lead to measures to insure the integrity of foreclosures and fair-dealing with those who are losing their homes,” Koster said. “While there were many causes of the financial crises affecting homeowners, banking procedures – such as robo-signing -- clearly have inhibited a return to stability,” he added.

Because of questionable practices regarding mortgage securitization and robo-signing, Koster said it is appropriate that the nation’s large banks help to mitigate the loss of home value experienced by homeowners.

Koster said he is hopeful that the 50-state working group, with which Missouri is actively involved, will lead to resolution for the robo-signing problems in the next three months. He noted that the group continues to seek substantive changes to banking procedures as well as bank contributions that would allow for mortgage write-downs in the tens of billions of dollars.

Koster said key provisions that should be included in any settlement are:

  • Standards for documents in foreclosure and bankruptcy proceedings
  • Requirements for accuracy and verification of borrower’s account information
  • Documentation of note-holder status and chain of assignment
  • Training, quality assurance systems and audits

Koster noted that mortgage settlement issues are a major part of the discussions at this week’s the National Association of Attorneys General conference in Washington, D.C.

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