Faculty Publications


A Blast from the Past: Are the Robo-Signing Issues that Plagued the Mortgage Crisis Set to Engulf the Student Loan Industry?

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Homeownership and a college education have long been considered part of the American Dream. In order to achieve homeownership, many Americans took out risky loans and sub-prime mortgages in the late 1990s and early 2000s. However, when housing prices plummeted, many homeowners were forced into foreclosure proceedings after they fell behind on their mortgage payments and could not resell their property to cover the full amount of their debt. In response to a record number of foreclosure proceedings and the overwhelming amount of paperwork associated with it, creditors began a predatory practice referred to as robo-signing, which is the process of certifying the accuracy of documents without any personal knowledge of the facts contained within the documents. The robo-signing practice deprived homeowners of their due process rights and, in some cases, cost people their homes. In response, the federal government imposed significant fines on robo-signers and state courts reacted by enacting new court rules to end the practice.