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 lender within the U.S., Ally Financial, due to this. More mortgage lenders within the United States could be affected by this as well. This is because Ally Financial processes documents from other companies as well, such as Fannie Mae and Freddie Mac. Millions of homeowners might start challenging their foreclosures in court as a result of the Ally Financial case.
Documenting foreclosure without verification
Forgetting to verify before foreclosing on a family is getting mortgage lenders in trouble. There are lots of accusations going around. Families trying to keep their houses got Jeffrey Stephan, Ally’s foreclosure document processing team head, to make a sword statement. He said that when signing paperwork, he read hardly any of them and had no notary around either. Stephan would sign up to 10,000 documents a month, which were bundled and sent off for notarization later. The Post explains that Stephen was only spending 1.5 minutes on each document. That is calculated by assuming he was working eight hour days. The documents were then used in court by law firms, sometimes called “foreclosure mills” to evict homeowners so the bank could sell their properties.
You will find nevertheless cases in court with mortgage lending abuse
The housing crisis and foreclosure epidemic happened as a result of abuses within the mortgage lending industry. These are still affecting other things that happen. According to the Wall Street Journal, investors have began purchasing mortgages as securities although they have been scrambled and changed beforehand which is frustrating the courts. The business that owns the mortgage is a mystery. Courts cannot figure it out easily. Property foreclosure documents are meant to help that a bit. They should clarify. In the case of Stephan, who has been called a “robo-signor,” and “affidavit slave,” the banks turning the homeowners out on the street don’t really know who owns the loan either.
Legally, seems like a gift to foreclosed homeowners
Within the last few years, Ally Financial has been putting out illegal property foreclosure documents. Now, Wall Street banks may start having problems with all the doubt from the last few years of foreclosures. Foreclosures may start being challenged more often. Homeowners have a reason why the property foreclosure may not be right now. 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 that the affiant is competent to testify on the matters stated.” To abide by the law, Stephan had to read the documents in detail to know what they said. Before he signed them, he had to be familiar enough with their contents to defend them in court.
Further 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
