According to Kate Berry at American Baker, “robo-signing ” concerns delayed thousands of foreclosures in the 23 states.   Now a new controversy is emerging. . .

The Notice of default.

The notice of default is the initial letter that a lender sends to a homeowner who is far enough behind on payments to begin a foreclosure. Every notice requires a signature.  In some cases, notices were signed by employees who did not verify the information.

Borrower attorneys are arguing that this is grounds to stop a foreclosure.

Christopher Peterson, dean and law professor at the University of Utah adds,

Foreclosure Timeline

“Whoever signs the [Notice of Default] needs to have knowledge that there is in fact a default,”.

As the NOD is literally the first formal step the lender takes  in the foreclosure process this practice is especially troubling.

Original Article: New Point of Foreclosure Contention: Default Notice from American Banker | Friday, January 21, 2011