“If courts around the country do not handle this on an individual case basis and there are later problems with the title, the courts will have participated with the clouding of the title,” Russo said. “The potential for harm is so immense at so many levels.”

Ohio GMAC Foreclosure Case May Set Anti-Wall Street Precedent\
By Michael Riley – Nov 8, 2010 3:06 PM ET Tweet (29)LinkedIn Share
When James Renfro had to stop making payments on his two-story fixer-upper in Parma, Ohio, a suburb of Cleveland, he triggered events that were supposed to result in the forced sale of his home.

That Nov. 15 auction has been canceled because of defects in documents submitted by his loan servicer, Ally Financial Inc.’s GMAC Mortgage unit. Two affidavits about Renfro’s home were signed by Jeffrey Stephan, a GMAC employee who said in sworn depositions in Florida and Maine that he hadn’t read thousands of affidavits he’d signed.

Renfro’s case has created a showdown between GMAC and Ohio’s Attorney General Richard Cordray. Cordray has asked Cuyahoga County Court of Common Pleas Judge Nancy Russo not to let GMAC simply submit new documents to cure defects without consequences. He’s taken the same stand against Wells Fargo & Co., which has said it found defects in 55,000 foreclosures.

“This is just the first,” said Cordray, who filed an amicus, or friend-of-the-court, brief in the Renfro case. He argued that Russo should punish GMAC, the fourth-largest U.S. mortgage lender, for its conduct.

The judge today in Cleveland set an accelerated schedule for evidence-gathering in the case, leading up to a Feb. 17 hearing on the integrity of the loan documents. Cordray’s office plans to file a motion tomorrow asking to take part in the case and participate in so-called discovery.

Allegations of Fraud

The precedent set by the case might hasten a settlement between home lenders and the attorneys general of the 50 U.S. states, who are investigating allegations of fraud in foreclosure filings. Those being probed include San-Francisco- based Wells Fargo, which has said it will re-file foreclosure affidavits involving statements that “did not strictly adhere to the required procedures.”

In potentially thousands of cases across the U.S., judges have the power to impose “sanctions, penalties, fines and even default,” as the banks try to submit substitute paperwork to proceed with flawed foreclosures, Cordray said.

“The banks want to wish this away and pretend like it doesn’t exist,” he said.

In September, Detroit-based Ally briefly suspended foreclosures in 23 states where there is judicial review and later announced an independent survey of foreclosure proceedings that would extend nationwide. After a review, the company began reinstating proceedings in cases it said didn’t involve errors.

‘Facts of Default’

“The underlying facts of default in this case are not in dispute,” Jim Olecki, a spokesman for Ally, said of the foreclosure of Renfro’s home. “We only pursued foreclosure after all other home preservation options had been exhausted.”

Ally disputes assertions Cordray made in his amicus brief in the Renfro case.

“To date, we have found no evidence of any inappropriate foreclosures,” Olecki said.

Tom Goyda, a spokesman for Wells Fargo, said the lender would go ahead with plans to re-submit thousands of affidavits in cases nationwide, including Ohio. When judges seek information on documents already filed, “we will work with them to meet their concerns,” Goyda said.

The 50-state investigation is focused on uncovering the scope of tainted foreclosures, including how many so-called robo-signers processed documents they didn’t review, Cordray said. So far, investigators have identified “double figures of robo-signers” working on behalf of lenders such as JPMorgan Chase & Co. and Bank of America Corp., he said.

Suspended Foreclosures

Such banks are conducting their own reviews to spot errors and determine how many cases with defects are involved. GMAC’s Stephan testified to signing as many as 10,000 documents a month. New York-based JPMorgan initially suspended foreclosures in 23 states affecting 56,000 cases to review potentially faulty documents.

Among the least appealing scenarios for the lenders is that affected cases will have to be examined, like the Renfro case, in individual courtrooms across the country, with the possibility of thousands of judges questioning robo-signers and other loan processing officials.

Renfro’s lawyer, Harold Williams, said he will ask to depose GMAC’s Stephan, among others. GMAC said in a filing withdrawing the sale of Renfro’s four-bedroom home from auction that “verification irregularities may have occurred.”

Judge Russo said in an interview that until hearing the evidence, she has no way of telling whether the documents represent an error, negligence, or fraud, and that other judges will have to make the same time-consuming inquiries.

‘10,000 Hearings’

“If Ohio has 10,000 of these cases, there should be 10,000 hearings,” Russo said. “I’m sympathetic to the fact that it’s onerous for the lenders, but I still have to do my job.”

The judge said she will hear arguments related to the integrity of the documents, how GMAC identified specific cases in which documents may be flawed, and what remediation steps the loan servicer and lender are taking. If she determines the circumstances rise to the level of fraud, GMAC could be found in contempt of court, Russo said.

“You’ll probably have different resolutions in different cases from different judges,” she said. “This is not going to be solved in a couple of months. The long-term effects are phenomenal.”

Russo’s court on the 18th floor of Cleveland’s sprawling Justice Center has been inundated with foreclosures as the city’s declining economy was exacerbated by the subprime mortgage crisis. A projected 12,553 foreclosures will be filed in surrounding Cuyahoga County in 2010, the most of any county in Ohio.

Renfro’s House

One of those cases already filed involved Renfro’s house on Klusner Avenue, which he purchased in 2005 for $114,900. An affidavit in support of a summary judgment motion to authorize foreclosure was done by Stephan, who is identified as a limited signing officer for GMAC Mortgage LLC.

Renfro had fallen five months behind in his payments by the time GMAC, the loan servicer for U.S. Bancorp, moved for foreclosure early this year, he said. An effort to reach a settlement with the lender failed because of Renfro’s high credit-card and other debt, and his $22,000-a-year salary as an auto mechanic, according to Williams, the Renfro lawyer who is with the Legal Aid Society of Cleveland.

“Once you get so far down, it’s such a struggle to get back up,” said Renfro, 36, who lives in the house with his girlfriend, stepson and 7-year-old daughter, who is deaf.

The nearby school is one of only two in the metro area that can provide Renfro’s daughter with a sign-language translator during the school day, he said.

Deaf Daughter

“It’s quiet,” said Renfro, who is following the GMAC- Cordray battle in Russo’s court. “If something finally goes my way, it will be such a relief. There’s a park at the end of the street. I wanted a safe sidewalk so she could ride her bike. Normal, typical things, I guess. I’m just trying to get back on track.”

Judges in Russo’s jurisdiction last week drafted new guidelines for dealing with robo-signers, following similar efforts in states such as New York. Under the new rules, attorneys for lenders would have to sign an affidavit swearing that they have communicated with a representative of the party seeking foreclosure and have been informed that an official “has personally reviewed the documents and records relating to this case,” according to a draft copy.

The policy will apply to pending cases, and an affidavit will have to be signed before a judgment is entered, said Stephen M. Bucha, the chief magistrate.

“The hope is that will preclude any robo-signing in the future, so that we don’t see a repeat of the problem,” Bucha said.

Future Sales

Bucha and other Cuyahoga County judges said they fear document foreclosure defects may give former homeowners a claim on the title that will affect future sales. That scenario fuels Judge Russo’s sense of urgency to sort out problems now, she said.

“If courts around the country do not handle this on an individual case basis and there are later problems with the title, the courts will have participated with the clouding of the title,” Russo said. “The potential for harm is so immense at so many levels.”

The case is U.S. Bank National Association v. Renfro, 10- 716322, Ohio Court of Common Pleas for Cuyahoga County (Cleveland).

To contact the reporter on this story: Michael Riley in Cleveland at

To contact the editor responsible for this story: David E. Rovella at

10 Responses

  1. When is each Governor going to stop all this with a executive order moratorium, before it gets much worst?


    You need an expert who is a WINTESS. Someone who can testify first hand to the fraud. You need a witness that is not using theory but actual practical experience?
    You need an expert who can lay out the entire arguments as he has years before this broke into the press. Thereafter, hire an appearance attorney from Craig’s list who will suffice. What does this expert know? Everything and more . . . more than you will ever comprehend.
    On Friday morning I am called by a NY attorney on a matter concerning a missing assignment. Get it? The attorney is a debt collections agency….he is trying to save his client, GMAC from losing a loan to a borrowers “Quiet Title” action.

    Like so many others the borrowers, this title holder is seeking to have the lender show standing for bringing a foreclosure. The problem is the court is asking the attorneys to evidence an assignment to GMAC.

    I discover the loan is PAID in full, charged off to a loss, covered by over collateralization, whatever. The home is free and clear
    GMAC never recorded the assignment from the originating lender.

    I am the originating lender.! Now GMAC is telling me to assign the loan from five years back…after admitting THEY ALREADY HAVE NOTICE IT HAS BEEN PAID OFF IN FULL.

    Without the assignment they cannot foreclose.

    I know the fraud first hand and our clients get to bring this information into a court of law. Want to win? Go find a witness to the crime . . . someone who has seen the crime first hand. The beneficiary is paid and is not entitled to an assignment.

    What do you expect your lawyer to do without this information? You go find a quote “good lawyer”. Then experience the real pain of losing a once in a lifetime shot at clearing title from a sham entry sale and sham exit sale.

    I know firsthand the Countrywide and First Franklin sham dating back to 2002. WMC, Accreditied…others?

    My arguments are something I don’t guess at…for I have proof and evidence of the fraud. I have spent countless hours on the phone with the FDIC Washington bureau of member bank compliance. They have problems here.

    Do I have your attention? Still want to tackle this on your own counsel?

    1.Who owned the TRS?
    2.What REMIS did the TRS hold stock in?
    3.Was the sale for purposes of transferring the asset by bone-fide sale?
    4.Why are the SOP and FAS 140 so critical to the arguments?
    5.The servicing agents are not allowed to talk to a borrower upon closing a security
    6.Why are you asked to miss two payments before you get a modification?
    7.Why is a deferred acquisition cost and basis the smoking gun?
    8.A grantee and beneficiary who credit bid cannot be a new entity at time of trustee sale
    9.A financial interest is not a financial asset
    10.Only a lock box can be used to collect payments. Or a debt collector. Why

    I have another 90 questions that first must be answered
    1.The creation of money – take Econ 101!
    2.Maritime law – I’m not an oceanographer!
    3.Crooked Judges – Male enhancement?
    4.Lost Note – Sherlock Homes is best bet.
    5.Pretender lender – I cannot take much more
    6.Need a mean Attorney – Don’t pay him
    7.QWR – Queer Weenie Roast
    8.General Ledger – Heath ledgers brother
    9.No standing – Prosthetics
    10.Substitution- Divorce

    I get your calls on occasion and you ask…Stop – please stop …I don’t want to hear this …Stop it please.

    Are you going to do this alone and with web site feed back? Better yet, form your own web site and send out email’s…I’m too overwhelmed to answer you question at this time.

    Free your mind and the rest will follow! You’re blowing this chance…

    You do not get it….do you?
    (Make him stop … someone please)


    It’s bigger than Watergate….maybe hire a reporter.
    You’re squandering this chance

  3. […] This post was mentioned on Twitter by John Carmine, kim thomas. kim thomas said: BLOOMBERG: TITLE CLOUD QUESTIONS RISING TIDE FOR DECADES: […]

  4. And this article from October shows what Citi knew about the significance of the ‘paperwork’ problems:

    They had a conference call where they were lectured by Adam Levitin who is an Associate Professor of Law at Georgetown University.

    I note that the law professor did not even touch on a variation of the ‘paperwork production’ that is actually done per the MERS handbook:
    Step 1: Substitution of trustee
    Step 2: NOD
    Step 3: NOS
    Step 4: Assignment of the Deed of Trust

    Now in my own case, there were some other court proceedings in the year that the first three actions occurred. In those court proceedings, the investors were identified as the securatized pool. The recorded Deed still showed only the Trade-Name for as the named ‘Lender’.

    The assignment into the pool is filed the following year. It is also dated in that year. So, who had authority the prior years? This later-generated assignment is produced by the same group that claimed they already had the authority as holders of the mortgage, some how. So now it is the same as acting to assign the mortgage to themselves?

    Also, the professor does not touch on the fact that the transfers NEEDED to be done in an A -> B -> C -> D manner. There are significant numbers of cases where only an assignment from A -> D occurred per the paperwork that has now been belatedly generated and recorded with the county. (Note: that simple A -> D assignment is present in my own case.)

  5. America is in Gridlock.

  6. I just recieved my first “ANSWER” from the primary party I alleged committed fraud in the origination.

    Page after page of cut/paste denials…. Then the light.

    “Plaintiff’s injuries and damages were a result of intentional and unforeseeable third party criminal acts, and no act or ommission on the part of Defendent was proximately related to the same.”

    In otherwords, yes we see the documents are all forged and fraudulent, but gee, we had no idea our employees were such nasty little crooks! We should not be blamed for this!

    And heck yes, we still want to take her home, even though al the documents are dated BEFORE she even was on the title…

  7. The Pendulum will swing back to the consumer attorneys hopefully We need large lawfirms to understand that their is also a Moral issue, not just a money issue

  8. The Consumer Attorneys were bought out by the big corporations.

    Sad but true

  9. On the cases whereby lenders have filed for motion for summary judgments, it would be my guess that the lenders won them all. All they had to do was type up an Allonge, not affixed to the Note, endorsing the note over to the lender and then using an invalid Power of Attorney if needed to prepare and execute the Assignment of Note and Deed of Trust. It makes no difference to the Judge because all he wants to know is, do you have the original note endorsed over to the lender, not whether or not the lender became holder and owner of the note legally or whether or not the Note and Deed of Trust was signed legally. In one of my cases as an advocate and friend of the Court, the lender that is foreclosing does not even own the mortgage as it has never been assigned legally, yet they were exercising the Power of Sale in that Deed of Trust.. The Judges need to consider all of these things. In this case, the lender got his MSJ and proceeded to foreclose even though everything was presented to the Judge as support and he actually had an opportunity to question the lender about the Allonge (that wasn’t even needed and who was not the last endorser of the note) and why did they use an invalid Power of Attorney to prepare and execute the assignment. What else could a homeowner have presented to the Judge. All he was doing was trying to make sure that the lender had the right. And this case came up two years ago and probably the same thing has been happening to other. Thank you Judge Russo for bringing all of this out so that Judges will now pay attention. They are indeed aiding and abetting the lenders when they look the other way.

  10. More Super Lawyers , like Mr. Weidner and Mr. Ice
    needed :

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