A U.S. District Court judge has thrown out a class-action lawsuit over alleged "robo-signing" of foreclosure court documentation. The suit was filed after a former paralegal at the defendant law firm Shapiro & Burson complained to regulators and prosecutors, claiming that robo-signing at the firm was routine. The federal-court ruling could be a blow for others seeking damages for alleged foreclosure misconduct.
Ballard Spahr partner Robert A. Scott, representing Shapiro & Burson, stated: "There's been a lot of publicity about robo-signing, and I think that this decision makes clear that these kind of claims can't be brought in a subsequent lawsuit. If you have a claim related to something that happened in the foreclosure, you have to bring it in the foreclosure case."
Regarding the homeowners, plaintiffs in the suit, Mr. Scott added that, "There's no dispute ... that they hadn't paid their mortgages and that the lenders that were foreclosing had the right to foreclose."