Ally Financial repossessed houses and evicted residents with property foreclosure . It was discovered that these documents weren’t verified for accuracy before being submitted. An Ally Financial employee admitted to signing off around 10,000 foreclosure paperwork a week without a notary and with even reading them. In 23 states, evictions of homeowners were suspended by the fourth largest mortgage company within the United States, Ally Financial, due to this. Ally Financial processed paperwork from other businesses such as Fannie Mae and Freddie Mac meaning the effect might spread even further. Millions of homeowners might start challenging their foreclosures in court because of the Ally Financial case.
Not having verification for foreclosure documents
Mortgage lenders in the country are starting to get called out for not confirming information before foreclosing on families. Head of Ally’s property foreclosure document process Jeffrey Stephan admit in a sworn statement with families trying to keep their homes, claims the Washington Post, that he had no notary present as he signed the documents without reading them. Documents Stephen signed would reach about 10,000 a month and then were sent to be notarized. 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. In court, the documents were still used by “foreclosure mills,” or simply a law firm. The firms wanted to evict people so the banks could sell to someone else.
Mortgage lending abuses continue in the courts
Abuses by the mortgage lending industry that led to the housing crisis and foreclosure epidemic are nevertheless having an effect. The Wall Street Journal reports that the courts are struggling with complex paperwork on millions of mortgages that have been packaged, chopped up, scrambled and resold to investors as securities. The schemes have made it difficult for courts to identify who actually owns a mortgage. Property foreclosure documents are meant to help that a bit. They should clarify. Stephen is starting to be called a “robo-signor,” and “affidavit slave.” Even the banks have no idea who owns the mortgaged of the people being in foreclosure process on anymore.
Legally, it appears a gift to in foreclosure process homeowners
Ally Financials illegal foreclosure documents may cast doubt over millions of foreclosures filed by Wall Street banks within the past few years. The issue could open the door for homeowners across the country to challenge foreclosure proceedings. Federal rules of civil procedure, states 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 had to know what was said within the documents well enough to defend them in court before signing them.
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
