Friday, September 24, 2010

How 2 Pro Bono Lawyers Uncovered ‘Robo-Signer,’ Halting Foreclosures in 23 States

By Debra Cassens Weiss
A Maine pro bono lawyer’s suspicions helped uncover a “robo-signer” mortgage employee and halt mortgage foreclosures in 23 states.
Pro bono lawyer Thomas Cox, who is retired from law practice, was representing a homeowner in a foreclosure case when he came across several documents signed by one GMAC employee: Jeffrey Stephan.
Cox, a lawyer in South Portland, Maine, turned for help to Geoffrey Lewis, a lawyer in Fryeburg, the Press Herald reports. In June, Cox deposed Stephan and learned that the employee of GMAC, now known as Ally Financial, was signing off on documents without verifying their accuracy.
It turned out that Stephan was signing 10,000 foreclosure documents a month, giving him only 1.5 minutes to review each document. Cox had uncovered information similar to that revealed in a December deposition. Both depositions were cited in a Washington Post story that says the revelations led Ally to halt foreclosures in 23 states and could pave the way to foreclosure challenges across the country.
"What blew me away," Cox told the Portland Press Herald, "was that Stephan admitted he didn't have custody of the file. It was scanned into a computer and he didn't even look at it. He didn't know if it was a true and accurate copy. He didn't read the affidavits. He just checked the numbers."
Cox and Lewis are volunteers with the pro bono group Maine Attorneys Saving Homes. They are still trying to get a summary judgment overturned in their client’s case.
Before retiring, Cox helped collect money from businesses that had borrowed money from a failed Maine bank, according to The Home Equity Theft Reporter blog, citing a story from the Morning Sentinel.

Foreclosure System Is ‘Riddled with Faked Documents’

By Debra Cassens Weiss
Revelations that an Ally Financial "robo-signer" employee routinely failed to review the lender's foreclosures for accuracy may be just the tip of the iceberg.
The admissions by the employee, charged with reviewing 10,000 cases a month, could have an impact beyond the 23 states where Ally has halted foreclosures, the Washington Post reported yesterday. Today the Washington Post reports that Ally isn’t the only lender whose employees failed to review foreclosure information before taking legal action.
According to the newspaper, “The nation's overburdened foreclosure system is riddled with faked documents, forged signatures and lenders who take shortcuts reviewing borrower's files, according to court documents and interviews with attorneys, housing advocates and company officials.”
Other lenders whose work is at issue include:
• JPMorgan Chase. One of its employees said in a May deposition that she signed off on thousands of foreclosures a month without verifying the accuracy.
• An employee of a document lending company owned by Lender Processing Services claimed to be an executive with several large banks, including Bank of America and Wells Fargo, when signing foreclosure affidavits. In one case she listed “bogus assignee” as the owner of a mortgage, and in another she signed as an officer of a fake company called “Bad Bene.” (The company says the names were just “placeholder phrasing.”)
Ally, formerly known as GMAC Mortgage Co., was used by Fannie Mae and Freddie Mac to service its loans.

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