Residents were evicted out of their foreclosed homes with documents that had not been verified however were prepared by Ally Financial. Without reading paperwork or having a notary present, about 10,000 property foreclosure documents a week were signed by one Ally Financial employee. Because this person spoke out to say what he had been doing, 23 states that had homeowners being evicted by Ally Financial, fourth largest mortgage company within the U.S., are now having all evictions suspended. Ally Financial processed paperwork from other businesses such as Fannie Mae and Freddie Mac meaning the effect might spread even further. An incredible number of homeowners might start challenging their foreclosures in court as a result of the Ally Financial case.
Foreclosure documents submitted without verification
Forgetting to verify before foreclosing on a family is getting mortgage lenders in trouble. There have been a lot of accusations going around. 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. 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. ”Foreclosure mills,” or law firms, would use these documents to evict homeowners for the financial institution to sell the home to someone else in court.
Abuse of mortgage lending in court keeps happening
There is still an effect happening from the mortgage lending industry abuses that lead to the foreclosure epidemic with the housing crisis. The Wall Street Journal reports that the courts are struggling with complex paperwork on an incredible number of mortgages that have been packaged, chopped up, scrambled and resold to investors as securities. The company that owns the mortgage is a mystery. Courts can’t figure it out easily. That is supposed to be easier to figure out with property foreclosure paperwork. Stephen is beginning to be called a “robo-signor,” and “affidavit slave.” Even the banks do not know who owns the mortgaged of the people being foreclosed on anymore.
A legal gift is given to in foreclosure process homeowners now
Wall Street banks might be in trouble with the Ally Financial unlawful documentation that has happened the last few years. Any homeowner in the country could challenge a property foreclosure coming their way. 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 that the affiant is competent to testify on the matters stated.” Stephen was designed to read the paperwork in detail before signing off on them. Before he signed them, he had to be familiar enough with their contents to defend them in court.
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
