Ally Financial repossessed houses and evicted people with foreclosure documents. It was found that these documents weren’t verified for reliability before being submitted. A single Ally Financial employee said he signed off on as much as 10,000 foreclosure paperwork a week without reading them and without a notary present. In 23 states, evictions of homeowners were suspended by the fourth largest mortgage company in the U.S., Ally Financial, because of this. Fannie Mae and Freddie Mac were two of the numerous other businesses that might be affected by this as they processed foreclosures through Ally Financial. The Ally Financial case could give millions of homeowners a stout legal leg to stand on for challenging foreclosure in court.
Documenting foreclosure without verification
Mortgage lenders in the country are beginning to get called out for not confirming information before foreclosing on families. The Washington Post reported that in sworn depositions involving families trying to keep their homes, Jeffrey Stephan, head of Ally’s foreclosure document processing team, neither read the documents or signed them within the presence of a notary as required. Stephan would sign up to 10,000 documents a month, which were bundled and sent off for notarization later. About 1.5 minutes was spent on each document at the rate Stephan was reviewing these files, claims the Post. The documents were then used in court by law firms, sometimes called “foreclosure mills” to evict homeowners so the financial institution could sell their properties.
Mortgage lending abuses continue in the courts
Abuses by the mortgage lending industry that led to the housing crisis and foreclosure epidemic are still having an effect. As outlined by the Wall Street Journal, investors have began buying mortgages as securities although they are scrambled and changed beforehand which is frustrating the courts. The company that owns the mortgage is a mystery. Courts can’t figure it out easily. Property foreclosure documents are meant to help that a bit. They should clarify. Many banks that are foreclosing have the same problem of not knowing who the loans belong to with Stephen, who has been called a “robo-signor,” and “affidavit slave.”
Now foreclosed homeowners have a lawful gift
Ally Financials illegal foreclosure documents may cast doubt over millions of foreclosures filed by Wall Street banks in the past few years. The issue could open the door for homeowners across the country to challenge foreclosure proceedings. Andy Kroll at Mother Jones writes that as outlined by federal rules of civil procedure, affidavits like the kind Stephan was signing “must be made on personal knowledge, set out facts that would be admissible in evidence, and show the affiant is competent to testify on the matters stated.” Stephen was supposed to read the paperwork in detail before signing off on them. Before he signed them, he had to be familiar enough with their contents to defend them in court.
Additional reading
Washington Post
washingtonpost.com/wp-dyn/content/article/2010/09/21/AR2010092105872.html?wpisrc=nl_pmheadline
Wall Street Journal
online.wsj.com/article/SB10001424052748703989304575504142243174842.html
Mother Jones
motherjones.com/mojo/2010/09/gmac-foreclosure-stephan-halt
