But even to some in the mortgage industry, the Passidomo bill overreaches, said J.T. Smith, chief investment officer of the Florida-based boutique investment bank Aristar Funding Corp. Smith said speeding up the process for abandoned properties made sense, but foreclosing on the borrower based almost entirely on the bank’s word isn’t fair.
“We have witnessed that plaintiffs are not beyond the forging of documents, notes, deeds, etc.,” Smith said. “The lending community has a ton of notes out there that were endorsed in blank, that means essentially these notes are like bearer bonds, whomever has possession is the owner. We, as lenders, made this mistake by using the endorsed in blank to save money on recording transfers, now we, as an industry, must reap what we have sowed.”