Ally Financial taken back homes and evicted residents with foreclosure paperwork. It was discovered that these documents weren’t verified for accuracy before being submitted. A single Ally Financial employee said he signed off on as much as 10,000 property 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 United States of America, Ally Financial, due to this. Ally Financial processed paperwork from other corporations such as Fannie Mae and Freddie Mac meaning the effect might spread even further. Millions of homeowners might start challenging their foreclosures in court as a result of the Ally Financial case.
Documenting foreclosure without verification
Some of the nation’s largest mortgage lenders have been accused of foreclosing on families without verifying all the info 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 in the presence of a notary as required. Documents Stephen signed would reach about 10,000 a month and then were sent to be notarized. 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 bank could sell their properties.
Mortgage lending abuses continue within the courts
Abuses by the mortgage lending industry that led to the housing crisis and foreclosure epidemic are still having an effect. The courts seem to have with all of the paperwork that mortgages seem to have now, says the Wall Street Journal. This is as the mortgages have been chopped, scrambled and resold to so numerous new corporations; it is hard to keep it straight. The schemes have made it difficult for courts to identify who really owns a mortgage. 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.”
Ally Financials illegal foreclosure documents may cast doubt over millions of foreclosures filed by Wall Street banks in the past few years. Any homeowner within the country could challenge a property foreclosure coming their way. 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.” To abide by the law, Stephan had to read the documents in detail to know what they said. He could not sign off on them until he knew the documents really well. He had to know them well enough that if a court case ever came, he could sign off on them.
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
