Ally Financial repossessed houses and evicted citizens with property foreclosure paperwork. It was discovered 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 within the U.S., Ally Financial, because of this. Other companies–including Fannie Mae and Freddie Mac–who used Ally Financial to process foreclosure documents may also be affected. The Ally Financial case could give millions of homeowners a stout legal leg to stand on for challenging foreclosure in court.
Foreclosure documents submitted without verification
Some of the nation’s largest mortgage lenders are accused of foreclosing on families without verifying all the information in a case. 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. Documents Stephen signed would reach about 10,000 a month and then were sent to be notarized. The Post said that at the rate Stephan was reviewing files, in an eight-hour day he would have spent an average of 1.5 minutes on each document. ”Foreclosure mills,” or law firms, would use these documents to evict homeowners for the bank to sell the home to someone else in court.
Mortgage lending abuse is nevertheless a problem in the courts
The housing crisis and foreclosure epidemic happened because of abuses within the mortgage lending industry. These are nevertheless affecting other things that happen. According to the Wall Street Journal, investors have started buying mortgages as securities although they are scrambled and changed beforehand which is frustrating the courts. The schemes have made it difficult for courts to identify who actually owns a mortgage. Foreclosure documents are intended to clarify that issue. In the case of Stephan, who has been called a “robo-signor,” and “affidavit slave,” the banks turning the homeowners out on the street do not really know who owns the loan either.
Homeowners being foreclosed on now have a legal gift
In the last few years, Ally Financial has been putting out illegal foreclosure paperwork. Now, Wall Street banks may start having issues 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. Federal rules of civil procedure, claims Andy Kroll at Mother Jones, show that what Stephen 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 intended to read the paperwork in detail before signing off to them. He couldn’t sign off to them until he knew the paperwork really well. He had to know them well enough that if a court case ever came, he could sign off on them.
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
