June 27, 2017

GMAC Halts Foreclosures in 23 States – Admitting Improper Affidavits

Anyone on the front lines of the War on the Home Front could utter a collective No Sh!$ to this Headline. It’s just that what we’ve been saying and really, shouting from the rooftops, for the last TWO YEARS! is finally getting through to the media, the judiciary (sort of) and many other players in this systemic mess we have come to know as the ‘Rocket Dockets’ across this country. We’ll give the 20th Judicial Circuit (out of Lee County, Florida) judges the credit for inventing their ingenious (or is that disingeniuous?) rocket docket term.

Folks, we’re still scratching the surface of this massive iceberg we call the foreclosure system in this country. There is so much fraud, misrepresentation and outright thievery taking place that it is really beyond the comprehension of the normal, honest working man and woman in this country. The foreclosure machine in this country (collectively the financial institutions, Wall Street, document outsourcing firms and the foreclosure attorneys working for God knows who) will ultimately make Bernie Madoff look like an angel in comparsion. Really.

So as this news begins to incubate in the hearts and minds of the state judges around the country (or are most of them too jaded and prejudiced to care?) along with state Attorney General’s (are you listening and reading?), just sit back and enjoy the way this plays out because I promise you, we are just getting started with Act I of the Foreclosure Machine Meltdown.

Enjoy…

Ally Says GMAC Mortgage Mishandled Affidavits on Foreclosures

By Dakin Campbell and Lorraine Woellert – Sep 21, 2010

Ally Financial Inc., whose GMAC Mortgage unit halted evictions in 23 states amid allegations of mishandled affidavits, said its filings contained no false claims about home loans.

The “defect” in affidavits used to support evictions was “technical” and was discovered by the company, Gina Proia, an Ally spokeswoman, said in an e-mailed statement. Employees submitted affidavits containing information they didn’t personally know was true and sometimes signed without a notary present, according to the statement. Most cases will be resolved in the next few weeks and those that can’t be fixed will “require court intervention,” Proia said.

“The entire situation is unfortunate and regrettable and GMAC Mortgage is diligently working to resolve the situation,” Proia said. “There was never any intent on the part of GMAC Mortgage to bypass court rules or procedures. Nor do these failures reflect any disrespect for our courts or the judicial processes.”

State officials are investigating allegations of fraudulent foreclosures at the nation’s largest home lenders and loan servicers. Lawyers defending mortgage borrowers have accused GMAC and other lenders of foreclosing on homeowners without verifying that they own the loans. In foreclosure cases, companies commonly file affidavits to start court proceedings.

“All the banks are the same, GMAC is the only one who’s gotten caught,” said Patricia Parker, an attorney at Jacksonville, Florida-based law firm, Parker & DuFresne. “This could be huge.”

No Misstatements

Aside from signing the affidavits without knowledge or a notary, “the sum and substance of the affidavits and all content were factually accurate,” Proia wrote in the e-mail. “Our internal review has revealed no evidence of any factual misstatements or inaccuracies concerning the details typically contained in these affidavits such as the loan balance, its delinquency, and the accuracy of the note and mortgage on the underlying transaction.”

Affidavits are statements written and sworn to in the presence of someone authorized to administer an oath, such as a notary public.

GMAC told brokers and agents to halt evictions tied to foreclosures on homeowners in 23 states including Florida, Connecticut and New York and said it may have to take “corrective action” on other foreclosures, according to a Sept. 17 memo. Foreclosures won’t be suspended and will continue with “no interruption,” Proia said in a statement yesterday.

10,000 a Week

In December 2009, a GMAC Mortgage employee said in a deposition that his team of 13 people signed “a round number of 10,000” affidavits and other foreclosure documents a month without verifying their accuracy. The employee said he relied on law firms sending him the affidavits to verify their accuracy instead of checking them with GMAC’s records as required. The affidavits were then used to complete the process of repossessing homes and evicting residents.

Florida Attorney General William McCollum is investigating three law firms that represent loan servicers in foreclosures, and are alleged to have submitted fraudulent documents to the courts, according to an Aug. 10 statement. The firms handled about 80 percent of foreclosure cases in the state, according to a letter from Representative Alan Grayson, a Florida Democrat.

“It appears that the actions we have taken and the attention we’ve paid to this issue could have had some impact on the actions that GMAC took today, but we can’t take full credit,” Ryan Wiggins, a spokeswoman for McCollum, said yesterday in a telephone interview.

‘Committed Fraud’

In August, Florida Circuit Court Judge Jean Johnson blocked a Jacksonville foreclosure brought by Washington Mutual Bank N.A. and JPMorgan Chase Bank, which had purchased the failed bank’s assets, and Shapiro & Fishman, the companies’ law firm. Documents eventually showed that the mortgage on the house was in fact owned by Washington-based Fannie Mae.

WaMu and the law firm “committed fraud on this court,” Johnson wrote. JPMorgan had presented a document prepared by Shapiro showing the mortgage was sold directly to WaMu in April 2008.

Tom Ice, founding partner of Ice Legal PA in Royal Palm Beach, Florida, said a fourth law firm representing GMAC in recent weeks has begun withdrawing affidavits signed by the GMAC employee.

“The banks are sitting up and taking notice that they can’t use falsified documents in the courtroom,” Ice said. “There may be others doing the same thing. They’re going to come back and say, ‘We’d better withdraw these,’” Ice said in a telephone interview.

Alejandra Arroyave, a lawyer with Lapin & Leichtling, a law firm in Coral Gables, Florida, who represented the employee at his December 2009 deposition, didn’t respond to a request for comment. A phone call to the employee wasn’t returned.

Mortgage Market

GMAC ranked fourth among U.S. home-loan originators in the first six months of this year, with $26 billion of mortgages, according to Inside Mortgage Finance, an industry newsletter. Wells Fargo & Co. ranked first, with $160 billion, and Citigroup Inc. was fifth, with $25 billion.

Iowa Assistant Attorney General Patrick Madigan said the implications of Ally’s internal review and the GMAC employee’s deposition could be “enormous.”

“It would call into question whether other servicers have engaged in similar practices,” Madigan said in a telephone interview. “It would be a major disruption to the foreclosure pipeline.”

To contact the reporters on this story: Dakin Campbell in San Francisco at [email protected]; Lorraine Woellert in Washington at [email protected].

To contact the editors responsible for this story: Alec McCabe at [email protected]; Lawrence Roberts at [email protected].

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