A Pennsylvania man has been accused by state prosecutors of illegally notarizing mortgage documents in a scheme to dupe low-income homeowners into securing inflated home loans.
Pennsylvania Attorney General Jerry Pappert has filed a lawsuit against Todd Verk of Sharon, Penn., who is accused of violating the state’s consumer protection and notary public laws by “accepting payment for illegally notarizing home improvement and loan documents for 60 consumers,” Pappert said in a statement.
Pappert said Verk allegedly notarized the documents for Zintron, a Pittsburgh-based home improvement contractor that used the documents to lure consumers into obtaining loans for home improvement projects that were never performed.
Zintron and others were sued by the state in June of 2001 for their alleged involvement in the home improvement scheme, Pappert said.
Pappert said the defendants lured “mostly low-income consumers with poor credit histories into home improvement and financing contracts that they failed to start, complete or adequately perform.”
Homeowners were forced to make payments on the loans, some of which were based on inflated home prices provided by the operators of the scheme, Pappert alleges in the suit.
That allowed Zintron and others to receive loans for greater amounts than the homes were worth, Pappert said.
In at least seven instances, the state had to step in and halt foreclosure proceedings against victims in the case who could not pay their mortgages, he said.
Verk could not be reached, but in an interview published by The Associated Press, he denied any wrongdoing and claimed he notarized the forms in good faith.
Verk has not performed as a notary for two years. He said in the AP interview that officials with Zintron came to him with forms that the company claimed could be accepted by a bank and asked him to notarize signatures by Zintron officials.
Zintron owner Tim McKee could not be reached.
In his statement Pappert said the Zintron documents included open-end mortgages, affidavits and error & omissions and compliance agreements.
“In many cases consumers were given a stack of documents to sign and were unaware of the terms of the agreements,” he said. “In some cases, Zintron failed to provide consumers with copies of documents.
“Mr. Verk allegedly notarized these documents without any of the 60 consumers physically signing the paperwork in his presence,” Pappert said. “State law requires that notaries must verify signatures on certain documents to ensure that they are real and not forged. To comply with the law the person must sign the documents in the presence of the notary after providing proper identification.”
In two cases consumers claimed their signatures, which Verk notarized, were forged.
Pappert also said Verk allegedly claimed he notarized the documents at the consumers’ homes “when in fact he never made the trips.”
Charles N. Faerber, vice president 230,000-member National Notary Association, said in an interview that “the cardinal sin of notarization is notarizing for someone when they are not in the physical presence of the notary.”
“Notaries are constantly being pressured by a boss, an acquaintance, a relative to notarize something when the signer is not there,” Faerber said.
Faerber said the association, which is based in suburban Los Angeles, has seen a pattern around the country “of the victimization and abuse of elderly homeowners” in mortgage fraud schemes that involve notarized documents.
Inner-city residents and homeowners who “may not be proficient in English” are also targets, he said.
The National Notary Association conducted a survey in September of 2002 and found that 42 of 55 U.S. states and territories hadn’t updated their identification standards and laws in at least 15 years.
The association has been promoting that governments adopt the Model Notary Act “to encourage a more proactive role for the nation’s 4.5 million notaries in deterring the impostors who circulate among us,” the association said in a statement.
“The (act) proposes strict identification standards and recommends that notary registers contain the signature and thumbprint of every document signer to aid in the prosecution of forgers,” the association said.
