GMAC Robo-Signers

GMAC Robo-Signers | Mortgage Lenders, Foreclosure Abuse | 2011 Real Estate Predictions

Submitted by Tim Harris on September 23, 2010 – 12:01 pmNo Comment | Popularity: 1% [?]

GMAC Robo-Signers. I am of two minds on this emerging story….

Will the wide spread practice of lenders using so-called Robo-Signers really be enough of a legal issue for judges to take action or…is this just a passing story? One thing I am perfectly clear about is the fact that in our current political and social climate many judges will feel compelled to side with the homeowners. Afterall, its trendy (and many would argue justified)to be a lender-hater.

Wanna bet that all servicers use Robo-Signers? Safe to say that the use of Robo-Signers is declared illegal…and judges toss out the thousands if not millions of foreclosure filings…this will have a dramatic effect on the 2011 real estate markets.

What do you think?

They are called robo-signers, putting their names on thousands of documents tied to mortgages facing foreclosure. Now, under pressure from borrowers, banks are halting foreclosures where the documents are signed by these employees.

This week, mortgage-servicing giant GMAC Mortgage Co. halted foreclosures in 23 states due to questions about documents signed by one of its robo-signers, Jeffrey Stephan.

Until now, Mr. Stephan was an anonymous middle manager whose job is to sign affidavits, assignments of mortgages and other documents that establish a bank’s ownership of a mortgage, thus giving the bank the right to foreclose.

But, as revelations come to light about how Mr. Stephan and other robo-signers do their jobs, a picture is emerging of a foreclosure process that critics say is just as flawed as the lax lending and perverse incentives that created the lending crisis.

In two sworn depositions given by Mr. Stephan over the last 10 months, he said that assistants brought as many as 500 documents a day to this desk at GMAC’s office in Fort Washington, Pa. Some months, he would sign more than 10,000 documents related to home foreclosures. By signing the documents, he was stating that he had personally reviewed the details of each case.

The problem is, according to depositions Mr. Stephan gave in December and June, he didn’t really look at each case. In fact, he assumed that all the details were correct, and just signed off on each one. Mr. Stephan also noted that, when he joined GMAC in 2004, he went through a training program that lasted three days.

“It just corrupts the entire process of justice when you have people signing documents as if they have personal knowledge of processes or information that they don’t have knowledge of,” said O. Max Gardner III, a South Carolina consumer bankruptcy lawyer who represents borrowers in these types of cases.

Now, lenders have begun withdrawing the affidavits signed by Mr. Stephan, thereby ending dozens of foreclosure proceedings across Florida, Maine and Texas. Many lawyers who represent borrowers in foreclosure have argued that the banks trying to repossess these homes don’t have the standing to do so, and are seeking to block the actions.

On Monday, GMAC confirmed that it suspended foreclosure sales and evictions in 23 states so that it can investigate its foreclosure procedures.

Mr. Stephan, a 41-year-old Penn State graduate from Sellersville, Pa., has worked at GMAC since 2004, and before that worked in collections and foreclosure processing work for ContiMortgage Corp. and Fairbanks Capital Corp. In depositions, he said that he had received a three-day training program in how to handle foreclosure paperwork when he joined GMAC.

Mr. Stephan couldn’t be reached, and his lawyers didn’t return calls seeking comment.

Ally Financial Inc., GMAC’s parent company, said Mr. Stephan is still working there and admitted there had been irregularities. “The entire situation is unfortunate and regrettable and GMAC Mortgage is diligently working to resolve the situation,” the company said in a statement.

Other servicers, as well, have been questioned over their practices. On May 17, Ice Legal, the Royal Palm Beach, Fla.-based law firm that first deposed Mr. Stephan last December, took a sworn deposition from Beth Cottrell, another robo-signer. Working as an operations specialist for Chase Home Mortgage, a division of J.P. Morgan Chase & Co., she said she regularly signed off on about 18,000 foreclosure affidavits and other documents each month, without ever personally reviewing the files associated with the loans.

When questioned about whether or not she had signed the documents based on her own personal knowledge of the cases, she replied, “My own personal knowledge, no.” Ms. Cottrell couldn’t be reached. A spokesman for Chase declined comment.

Todd Zwicki, a professor of real-estate finance at George Mason University, said the revelations about Mr. Stephan and other alleged robo-signers could have a wide range of repercussions, “from being a gigantic monkey wrench in the works, to being something really small.” Judges might stop accepting foreclosure filings if there is any question of the accuracy of the documents, which could cause holdups in the process of working through millions of homes nationwide going through foreclosure.

“The kind of facts that you’re talking about here are the facts that judges don’t like—this kind of assembly-line paperwork pushing with no oversight. There’s good reason for lenders to be worried about here, if they misstep,” Mr. Zwicki said. “It could be a relatively sever hurdle to foreclosures.

19 Responses

  1. I have an “Assignment” from a long dissolved (2007) Option One Mortgage Corporation. Wilbur Ross, a multi-billionaire, formed a brand new corporation called Option One Mortgage Corporation, (the second) claiming to own the mortgage that the old, dead, corporation had. But, when they ‘assigned’ the mortgage to Wells Fargo Bank, NA., Trustee, they didn’t know that they were required to file an assignment from the dead corporation (before it died) to the newly formed Option One Mortgage Corporation with the county register of deeds office. Therefore the “Assignment” fails if it is an assignment from the dead corporation after it was dissolved and it also fails if it is signed by the new corporation because it did not record any proof that it owned the mortgage via an assignment from the dead corp. The “Assignment” was signed by “Korell Hart” and “Tawanda Thomas”. Does anyone know how I can prove that they are “robosigners”? Thanks. drjustian@yahoo.com

  2. hmmmm, that may explain Mahers’ disregard for the RULES OF PUNCTUATION.

    oops, I’m guilty, too. Last Wells Fargo post came from a SecuritiesLaw360 e-newsletter. I disburse what I feel is relevant to the conversation.

    But, Maher, you should do better.

  3. frankielee

    Interesting. And, these investors who are claiming fraud – are NOT attempting recovery of their investments via Foreclosure proceeds. NO investor lawsuit includes a subtraction of foreclosure proceeds from claimed damages. Why?? because these investors were NEVER entitled to foreclosure proceeds.

    And, that is the way it is.

  4. M. Soliman, below you wrote:

    “Wall Street which created these securities, peddled them to investors, and then shrugged when those investors lost money — has been minimal. All the big banks are in recovery mode and continue minting money, taking advantage of the Federal Reserve’s low interest rate policies, which seem aimed at helping them first and foremost.”

    ~~snip~~

    And from the NY Times, Joe Nocera wrote:

    http://www.nytimes.com/2010/09/25/business/25nocera.html?src=me&ref=business

    “And yet the price Wall Street has paid — Wall Street which created these securities, peddled them to investors, and then shrugged when those investors lost money — has been minimal…… all the big banks have been minting money, taking advantage of the Federal Reserve’s low interest rate policies, which seem aimed at helping them first and foremost.”

    I’m confused. Are you and Joe one and the same? Or, should you or he be attributing one another? Twins?

  5. http://voices.washingtonpost.com/political-economy/

    Here is even more coverage on the “foreclosure crisis” and scroll down to find the article on “Linda Green” as “Robo Signer” for DOCX…

    Conveniently, DOCX is no longer in business so it begs the question “Now What”??

    How the hell are we supposed to “depose” Linda Green/Tywanna Thomas/Korell Harp/Ron Meharg???

  6. it’s not just GMAC in Florida or judicial states using robo signers. All these f’cks are using robo signers across the country. Why else is FIS, LPS, DOCX, and the rest of the crew posting record profits?

  7. PLEASE STOP ASKING TO SEE THE LOST NOTE . . .
    The note lost to the seller at sale!

    Contrary to what I know, I am asking for help. What’s wrong with this comment submitted by a livinglies reader –“My attorney tells me that in Florida, assignments aren’t needed to foreclose. So long as you possess the note, you can foreclose.

    Your foreclosure is granted a lender in the event of a default and upon acceleration. In foreclosure only the holder of the note or agents can prosecute the terms and conditions of the contract. Many readers in foreclosure are fighting an alleged holder in due course that either sold the loan or procured the sale of the loan to a third party by way of a scheme using a piggy back warehouse line.

    Under accounting rules FAS140 the loan, when sold, is lost to all control by the selling parties. What is sold is final and now you’re asking to see the note?

    The lender shown on the HUD I settlement statement are the likely selling parties and yet are claiming to be a holder in due course. Why are you asking them for the note and inviting a chance for them to produce the original or even a certified copy? Of course they do not have the note as it was SOLD.

    The economic advantages in a mortgage backed securities offering demand the sale of the promissory note. Your note which represents the annual yield based on an accrual and per diem payment stream was SOLD as was the entire loan; sold away as a whole loan asset.

    While being deposed earlier this year, lenders counsel asked over 186 pages of questions about the effects of cow gasses emitted into the ozone layer, who was Freddie Blassie and why does the Iron Sheiks boots curl at the end. By day two of the deposition the lenders chief counsel begins asking mortgage questions. My heart went out to this “mega moron” as I could see his right hand covering his left hand that was shaking.

    Now comes the moment of truth and departure from the previous day’s rehearsal for the filming of the tide talking stain. I am asked “Can a lender foreclose on a mortgage in default?”

    My answer is “No; it cannot…” (Explain) “Not without some form of accounting rules abatement and IRS reporting avoidance! I continued, “Only then my level headed friend, then can you foreclose and such is conditioned upon letting Enron and Tyco executives out of prison.”

    Foreclosures are the tail end of the production and now being orchestrated in similar fashion to a Bullfight (which I neither condone nor condemn). After the bull runs out, and is systematically tortured, traumatized, repeatedly stabbed, lanced and mutilated does the show almost conclude. It’s after the serious dehydration and massive hemorrhaging that one or the other parties dies. After the matador leaves the ring will enter a couple of mules brought into the ring to haul away the dead beast. That is not the final act however.

    Some poor guys run out and take his broom and scooper and to the avail of a cheering crowd he sweeps up and collects the bull dung. Here too is the final act of the long foreclosure process with attorneys armed with “poop scoops” who act like “Dog” the bounty hunter, scooping up homes as if they were abandoned. They act as if granted the authority under eminent domain (hmmm) and by some understanding that seems to fit the order of a Federal subrogation claims fulfillment (hmmm).

    The courts have held a lender who sells its loans through a GSE and into a secondary market can retain the servicing rights for value and therein can in fact foreclose. Herein is the monumental argument most go to court and will miss.

    These loans are sold into the private sector and are not conditioned as would a Fannie Mae class of mortgages. Unlike Fannie Mae and Freddie Mertz, lenders in a private label offering must sell the asset “Whole” with nothing retained including servicing. Even the slightest guarantees create an argument for leveraging debt and borrowing against the assets originated. The sale into the security is thereby void.

    As for servicing remembers the loans are transferred into a special purpose entity and sealed shut forever. These isolated “remote’ entities operate under the accounting term “brain-dead” and cannot be managed to control delinquencies.

    FAS 140 states again the sale of your loan into a pooled collateralized investment demands the transferor derecognizes the financial asset. This is further clarified as impacting any and all components of a financial asset, such as servicing.

    Servicing agents are collections companies or debt collectors – – – get it! There is NO NOTE so stop asking; predicated upon the asset was sold into a private label investment such as a mortgage backed security. When your loan was transferred the lender no longer maintained any continuing interest in it.

    Otherwise, all proceeds are accounted for as liabilities until all continuing interests in the transferred financial assets are terminated. So if these surviving successors by merger and assignsto banks meerly restate earnings and offset current assets by mammoth liabilities, they can then establish a new class of liability. IRS Payments and “reserves” set aside for 10 years of domestic and offshore investment in rescinded tax deferral provided to certificate investors…

    Now, that will without question bankrupt the US banking sector!

    M..Soliman
    Expert.witness@live.com

  8. PLEASE STOP ASKING TO SEE THE LOST NOTE . . .
    The note lost to the seller at sale!

    M.soliman
    expert.witness@live.com

    Contrary to what I know, I am asking for help. What’s wrong with this comment submitted by a livinglies reader –“My attorney tells me that in Florida, assignments aren’t needed to foreclose. So long as you possess the note, you can foreclose.
    ——————————————————————-
    Your foreclosure is granted a lender in the event of a default and upon acceleration. In foreclosure only the holder of the note or agents can prosecute the terms and conditions of the contract. Many readers in foreclosure are fighting an alleged holder in due course that either sold the loan or procured the sale of the loan to a third party by way of a scheme using a piggy back warehouse line.

    Under accounting rules FAS140 the loan, when sold, is lost to all control by the selling parties. What is sold is final and now you’re asking to see the note?

    The lender shown on the HUD I settlement statement are the likely selling parties and yet are claiming to be a holder in due course. Why are you asking them for the note and inviting a chance for them to produce the original or even a certified copy? Of course they do not have the note as it was SOLD.

    The economic advantages in a mortgage backed securities offering demand the sale of the promissory note. Your note which represents the annual yield based on an accrual and per diem payment stream was SOLD as was the entire loan; sold away as a whole loan asset.

    While being deposed earlier this year, lenders counsel asked over 186 pages of questions about the effects of cow gasses emitted into the ozone layer, who was Freddie Blassie and why does the Iron Sheiks boots curl at the end. By day two of the deposition the lenders chief counsel begins asking mortgage questions. My heart went out to this “mega moron” as I could see his right hand covering his left hand that was shaking.

    Now comes the moment of truth and departure from the previous day’s rehearsal for the filming of the tide talking stain. I am asked “Can a lender foreclose on a mortgage in default?”

    My answer is “No; it cannot…” (Explain) “Not without some form of accounting rules abatement and IRS reporting avoidance! I continued, “Only then my level headed friend, then can you foreclose and such is conditioned upon letting Enron and Tyco executives out of prison.”

    Foreclosures are the tail end of the production and now being orchestrated in similar fashion to a Bullfight (which I neither condone nor condemn). After the bull runs out, and is systematically tortured, traumatized, repeatedly stabbed, lanced and mutilated does the show almost conclude. It’s after the serious dehydration and massive hemorrhaging that one or the other parties dies. After the matador leaves the ring will enter a couple of mules brought into the ring to haul away the dead beast. That is not the final act however.

    Some poor guys run out and take his broom and scooper and to the avail of a cheering crowd he sweeps up and collects the bull dung. Here too is the final act of the long foreclosure process with attorneys armed with “poop scoops” who act like “Dog” the bounty hunter, scooping up homes as if they were abandoned. They act as if granted the authority under eminent domain (hmmm) and by some understanding that seems to fit the order of a Federal subrogation claims fulfillment (hmmm).

    The courts have held a lender who sells its loans through a GSE and into a secondary market can retain the servicing rights for value and therein can in fact foreclose. Herein is the monumental argument most go to court and will miss.

    These loans are sold into the private sector and are not conditioned as would a Fannie Mae class of mortgages. Unlike Fannie Mae and Freddie Mertz, lenders in a private label offering must sell the asset “Whole” with nothing retained including servicing. Even the slightest guarantees create an argument for leveraging debt and borrowing against the assets originated. The sale into the security is thereby void.

    As for servicing remembers the loans are transferred into a special purpose entity and sealed shut forever. These isolated “remote’ entities operate under the accounting term “brain-dead” and cannot be managed to control delinquencies.

    FAS 140 states again the sale of your loan into a pooled collateralized investment demands the transferor derecognizes the financial asset. This is further clarified as impacting any and all components of a financial asset, such as servicing.

    Servicing agents are collections companies or debt collectors – – – get it! There is NO NOTE so stop asking; predicated upon the asset was sold into a private label investment such as a mortgage backed security. When your loan was transferred the lender no longer maintained any continuing interest in it.

    Otherwise, all proceeds are accounted for as liabilities until all continuing interests in the transferred financial assets are terminated. So if these surviving successors by merger and assignsto banks meerly restate earnings and offset current assets by mammoth liabilities, they can then establish a new class of liability. IRS Payments and “reserves” set aside for 10 years of domestic and offshore investment in rescinded tax deferral provided to certificate investors…

    Now, that will without question bankrupt the US banking sector!

    M..Soliman
    Expert.witness@live.com

  9. Maher Soliman
    Published: September 24, 2010

    Its a fact the many iinvestors realized huge losses in auction rate securities. These securities were sold to them as risk-free places to park their cash.

    Its is estimated that Institutional investors and pension funds across the country lost billions of dollars. Their losses are soley due to having been “jacked” by Wall Street upon having been told that triple-A tranches of mortgage-backed securities were nearly as safe as Treasury bonds.

    No doubt, the price investors have paid has been enormous. And yet the price Wall Street has paid — is far from horrific and more in line with “managable losses”.

    Wall Street which created these securities, peddled them to investors, and then shrugged when those investors lost money — has been minimal.

    All the big banks are in recovery mode and continue minting money, taking advantage of the Federal Reserve’s low interest rate policies, which seem aimed at helping them first and foremost.

    I dont subscribe to the arguments surrounding the creation of money. That uneventful discovery came in a junior college 30 years ago in a class called Econ I

    I do enjoy trying to quantify the loss of money into a abyss and void called diminished housing values and charges to lost mortgages which were written down to zero. Its these overcapitalized mortgages upon which securities were issued that could never sustain themselves predicated on borrower income recorded an average of five times the borrowers earning capacity.

    In one case file we are evaluating the economic profile for the area is “blue collar”, $66,000 annually or $123,000 for a two earning household. The median housing prices are $322,000 and predominant value for the area is $325,000.

    SunTrust is foreclosing on a neighborhood of homes and mortgages averaging $850,000.

    One economic accounting web site claims that only braindead bankers eating their daily morning ration of WTF cereal could ever have rationalized such gibberish.

    Maher Soliman
    expert.witness@live.com

  10. Simon,

    And, depends whether the note was actually negotiable. With all the fraud – appears none were validly negotiable. Cannot have collapse of MBS Trusts due to mis-representations and fraud – with the note surviving as negotiable.

  11. Each and every one of us should be looking for Jeffrey Stephan’s signature in the states that they haven’t withdrawn the foreclosures. When you find them, submit them to the AG.

  12. “During times of the Great Domestic Deceit, finding the truth becomes a revolutionary act. ” Our constitutional rights have been violated, our savings fleeced, our homes and neighborhoods were raped. It is nothing more than grand theft and the destruction of property. This has become a “The Criminal Constitution of the United States”.
    We need to demand restoration.

    I still say that every US Homeowner shall stop their mortgage payments!
    Be a Patriot! Let’s get these bastards!

  13. Does anyone know if there is something in the works for the “Affidavits” that DOCX/Linda Green/Tywanna Thomas/Korell Harp have done and recorded and/or submitted into Courts???

  14. The risk for anyone who owns reals estate of any kind is that any one with some relative smarts will engage in the creation of documents for the purpose of doing the same the banksters and their criminal element foreclosure mill minions are doing. What this means is that you may be drinking coffee at your kitchen table one morning and your neighbor may be working toward stealing your home with doctored docs and the judges will rule on their favor, because on paper you will look as if you are a dead beat borrower.

    So the issue of this being a simple technicality has more in depth consequences. What we must do is keep bringing this to the forefront of the news cycle and force public opinion to realize that they are also in danger, it is not only my house but theirs that is caught inside this ugly web of lies.

    Write to your local papers large and small, visit with the editor, call your state legislators, go your local court house and raise the concerns, write to your local and federal judges letters raising concerns about this very issue.

    And once you get the chance and opportunity file BAR complaints and grievances against the lawyers and law firms that are using tis methods, which in essence is all of them nationwide.

    Yesterday O called the offices of Congressman Frank Wolf of Virginia and expressed my outrage and demanded he makes his position known to Virginians, I also wrote a letter and sent it registered mail to all our Virginia legislators. I know they are sold outs to the banksters, but at least I did something.

    Will you do the same!!!

  15. “By signing the documents, he was stating that he had personally reviewed the details of each case.”

    Errr, Well, NOT EXACTLY. Wasn’t he was SWEARING UNDER OATH that he had personally reviewed the details of each case. Wasn’t the notary also, in effect, SWEARING UNDER OATH in the acknowledgment (that is said to have happened days after Mr. Stephan signed). Were these people ONLY simply paid to sign documents? Weren’t they paid to lie under oath as directed by and for their employers and their employers attorneys. Especially with the large numbers of cases involving this activity, isn’t this the stuff of RICO actions?

    Given this deliberate fraud, are plaintiffs and their attorneys in these cases really allowed a “mulligan” by “withdrawing” the affidavits and/or assignments of mortgage?

  16. .
    If judges allow robo signed papers to be admissable ‘evidence’, enough to confiscate homes in the name of a phantom, should those who lost ‘stable’ jobs join class-action lawfirms? These firms should apply for “stimulus” funds in order to reduce unemployment – instantly.

    What about robo-signing all the papers needed to sue the confiscators and those dealing in contraband, stolen homes? What will the judges do then?
    More void judgments?

    see: https://secure.wikimedia.org/wikipedia/en/wiki/Kangaroo_court
    .

  17. Simon. Your atty went to the “School of Alternative Law”. Ask him which law supports that notion!

  18. My atty tells me that in Florida, assignments aren’t needed to foreclose. So long as you possess the note, you can foreclose.

  19. It will be up to pro se and lawyers as well as lawmakers to educate the judges on the laws if the judges are siding with anyone..

    Aren’t judges supposed to side with the law??????????????????????????????????????????This is where we get in problems with Supreme Court (i am not in legla field at all) People have allowed judges to MAKE law.

    This is only one part of the fruad… GARFIELD you are a lawyer – what do YOU think the judges will do in Arizona let alone Florida.

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