GMAC Mortgage unit agreed to drop about 250 foreclosure cases in Maryland

http://dailybail.com/home/gmac-agrees-to-dismiss-hundreds-of-maryland-foreclosures-clo.html

Reported late Tuesday night from Bloomberg…

(Bloomberg) – Ally Financial Inc.’s GMAC Mortgage unit agreed to drop about 250 foreclosure cases in Maryland that were tied to defective affidavits, the company said Tuesday. “We’re dismissing the cases but they will be re-filed,” Proia said. “The intention is to re-file the cases to go through the new foreclosure procedures in Maryland.”

GMAC’s decision comes after a Maryland nonprofit, Civil Justice Inc., agreed to drop a class-action lawsuit on behalf of homeowners whose foreclosure documents were signed by GMAC employee Jeffrey Stephan, Anthony DePastina, an attorney for Civil Justice, said in a phone interview.

Stephan said in sworn depositions last year and in 2009 that he signed as many as 10,000 affidavits a month without checking their accuracy in a practice that has come to be known as “robo-signing.”

“Hopefully GMAC’s actions will set a precedent with other lenders where robo-signing has occurred,” DePastina said. “I think there will be a ripple effect throughout the country.”

DePastina said as many as 1,000 foreclosures may be tied to defective affidavits. Proia said that number is “factually inaccurate.”

Continue reading at Bloomberg…

More on this story…

GMAC foreclosure cases in Maryland dismissed due to defective affidavits

A recent defense class action lawsuit in Maryland resulted in the dismissal of hundreds, if not thousands, foreclosure cases initiated by GMAC Mortgage. GMAC’s ability to re-file the foreclosure documents remains intact.

Baltimore non-profit Civil Justice, Inc. and the University of Maryland School of Law Consumer Protection Clinic brought what they’re calling the first ever defense class action suit against the mortgage company in October, alleging wrongful foreclosure due to faulty foreclosure affidavits.

“We filed a defense class action lawsuit, meaning instead of filing affirmatively, we used the case as a defense for all those individuals being sued or foreclosed upon by GMAC,” defense attorney Tony DePastina told HousingWire.

DePastina, alongside partner Philip Robinson and head of the university Consumer Protection Clinic Peter Holland, defended the case on behalf of Kevin Matthews and “a class of similarly situated persons.” GMAC filed a foreclosure case against Matthews in March 2010.

Maryland is a quasi-judicial state with regard to foreclosures, meaning that a foreclosure will only go through the court if a case is filed. Not all foreclosures have a case filed.

http://www.housingwire.com/2011/01/18/gmac-foreclosure-cases-in-maryland-dismissed-due-to-defective-affidavits

David Dayen at FDL got a little excited when he first read the ruling Sunday…as you see in his headline…

10,000 GMAC Foreclosures Stopped in Maryland

21 Responses

  1. GMAC… Payments or Not, The Foreclosure Machine that Just Won’t Stop

    Once upon a time…

    Our story begins back in 1995 when Michael and Pamella Negrea built their 2400 square-foot, colonial style home in Eastlake, Ohio, and took out a $200,000 mortgage. Michael’s 53 years old, a Willoughby, Ohio police officer for 25 years… Pam, a graphic designer, is 57. They’ve never been late on, much less missed a single mortgage payment. Nary a one… they should be quite proud.

    Since that time, however, GMAC has foreclosed on Michael and Pamella Negrea’s home three times… so far. The couple’s attorney, Stephen Futterer, also of Willoughby, says…

    “It’s like a foreclosure machine. It won’t stop.”

    The first time GMAC foreclosed on the couple’s home was back in 2001. Totally current on their mortgage payments, it must have come as quite a shock. Once in foreclosure, GMAC wouldn’t accept their monthly payments, so each month they deposited them into a bank account and awaited their day in court.

    According to the story in the Cleveland Plain Dealer, Michael Negrea explains…

    “You’d call and talk to someone and they said they’d look into it. When you called and asked for the person you talked to, they no longer worked for the company. You’d leave a message for a supervisor, and they’d never call you back.”

    The attorneys finally worked out a settlement in 2003. Since the couple had never actually missed a payment, the Negreas would only be required to pay the actual payments owed… not a dime in penalties or interest would be charged, and the foreclosure case was dismissed by the court.

    In the written settlement agreement, GMAC also agreed to erase the foreclosure and late payments from the couple’s credit reports, although here we are… EIGHT YEARS LATER, and the Negreas say that still has not happened.

    The Negreas resumed making normal payments again in early 2004. I imagine they were probably relieved that the whole ordeal was finally over. “Whew! Well, I’m sure glad that nightmare is over,” I can just hear Mr. Negrea saying to himself.

    It was June, when GMAC sent the couple yet another default letter. Michael and Pam not only had copies of their canceled checks, but they also had the return receipts from the U.S. Postal Service that showed the exact dates they had sent their payments and when they GMAC had received them. As always, the couple had made all payments on time, as agreed.

    A month later, in July, GMAC apologized for their error. Ooopsie! Sorry about that.

    The rest of the summer was fairly uneventful, but in October, the Negreas received yet another default letter from their friends at GMAC.

    And right after that they got another letter from GMAC, this time saying that their homeowners’ insurance, which was $500 a year, had not been paid. GMAC was notifying them that the bank had taken out a new policy on their home. The new premium would be $3,200 a year.

    There was only one small, teensy-weensey, almost insignificant, little detail: The Negrea’s homeowners’ insurance policy HAD NOT lapsed. Like the couple’s mortgage payments, it had been paid as agreed. They’d been with the same insurance company ever since buying the home back in 1995, and although it must have seemed foreign to GMAC, the insurance company’s policy was not to cancel homeowners’ policies when the premiums were paid as agreed.

    It got worked out though… and GMAC sent the couple another letter apologizing. Ooopsie, again!

    The couple must have been hoping that they could finally have a wonderful Christmas that year, without GMAC foreclosing and all that, but as the month went on, they noticed that the check they’d written to make their December payment had not been cashed. Uh oh… they must have thought. (I wish this was radio and I could play some scary music right about now.)

    The very next month, January of 2005, just two short years after the first case was dismissed, GMAC, who is apparently every bit as tenacious as they are incompetent, foreclosed on the couple’s home YET AGAIN. And this time the bank would not back down.

    Not much had changed since the last time around. The Negreas were still current on their mortgage payments, darn them… and ultimately the foreclosure would be thrown out of court once again. But this time the couple, quite understandably, had lost some of their patience with the bank, so they sued GMAC for breach of contract, fraud and unfair debt collection… and this time they insisted on going all the way to trial.

    Michael Negrea told Cleveland Plain Dealer reporter, Chuck Crow, that as the evidence was presented, “you could hear some of the people on the jury saying, ‘Oh my gosh.’”

    The Negreas were awarded $217,000, which you would think would have been enough to wipe out their $200,000 mortgage, but it took GMAC… are you sitting down… THREE YEARS to make the payment as ordered by the court… and by that time, GMAC had added $50,000 in fees to the balance of their loan.

    Okay… TIME OUT.

    Why the heck didn’t the Negreas go refinance the loan with a real bank… you know the kind that’s supposed to be pretty good at keeping track of money it receives? Were you wondering that as well? Funny story…

    They tried to… but they had two foreclosures on their credit report, along with countless late payments. Ooopsie!

    Now look… I realize you must be tired. I mean, I’m tired and I’m only writing this story. Reading it must be nothing short of excruciating. But, I’m sorry to tell you… it’s not over yet, so go get some coffee or something… ‘cause god old GMAC… the foreclosure machine… wasn’t done yet.

    It was 2008 when the couple received another troubling statement from GMAC.

    The bank was now DEMANDING PAYMENT for its attorneys’ fees… the ones incurred by the bank during the second foreclosure case. That’s right… the case that the bank LOST… the case where the Negreas filed the counterclaim and won the $217,000 that took GMAC THREE YEARS to pay… the case where GMAC had to pay the couple’s legal fees.

    Michael Negrea asked: “How can you ask for legal fees when you paid our legal fees?”

    Oh come on, Michael… with all due respect, do you have a learning disability? You’re lucky GMAC didn’t bill you for the whole $217,000 plus penalties and interest and initiate foreclosure proceedings once again. I don’t know about the rest of you reading this, but I’m thinking that it’s pretty obvious that Mr. Negrea should have just paid the bank’s legal fees and figured he got off easy.

    He didn’t, however, and it must have made GMAC awful mad because throughout the last few years, GMAC just keeps accusing the Negreas of not having homeowners’ insurance. And not only that, but right after that the bank started insisting that it had to make monthly home inspections, and started charging the Negreas $700 or more for each such inspection.

    GMAC told the couple that the inspections were being done in order to make sure that they still lived there.

    Ohhhh, is that why? Now I get it. See… I told you that you should have paid the bank’s legal fees when they asked you to. See what you’ve gone and done? You had to be a troublemaker, didn’t you?

    (Hey, I heard that. Don’t you dare think what you’re thinking about me right now… there’ll be a link at the end and you can read the story for your-damn-self. I’m telling it, just like it says. I’m not exaggerating a thing.)

    Okay, so the couple goes back to making normal payments throughout much of 2009, when all of a sudden… wonder of wonders, miracles of miracles… GMAC stopped cashing their monthly mortgage payment checks AGAIN.

    Oh no they didn’t. Oh yes they did.

    This time GMAC said the couple owed nearly $310,000… plus attorneys’ fees… on what was their $208,000 mortgage, and in August of 2009, GMAC filed for foreclosure AGAIN… this time in federal court instead of Ohio’s common pleas court.

    The couple’s attorney, Mr. Futterer told the Cleveland Plain Dealer…

    “We feel they’re court-shopping.”

    Court shopping, Mr. Futterer? I mean, you’re the attorney here, I’m just some lowly homeowner with a blog and some extra time on my hands, but you would even attempt to explain in logical terms what GMAC is doing? And “court shopping,” would be your guess?

    Maybe you’re right, but based on what’s transpired over the last (almost) ten years, I’d say that it might be court shopping, or it might be that the bank is fixing to plant kilos of cocaine in your car and call the DEA to have you arrested… or maybe they’re going to fill your trunk with explosives and then ask to borrow it… so they can blow themselves up. Or maybe their plot involves cottage cheese.

    Who the hell knows what these people are thinking?

    The trial, by the way, is scheduled for later this month.
    ~~~

    Here are a few quotes from the story that ran in the Cleveland newspaper:

    “I can’t image how many people lost their houses who didn’t deserve it,” Michael Negrea said.

    “I think a lot of people would have just given up,” said Pamella Negrea, a graphic designer.

    “Nobody believes us. People think, ‘A bank wouldn’t file for foreclosure if the bank wasn’t right.’”

    Michael Negrea says most people he talks with can’t even comprehend their tale.

    “You think, ‘You make your payments, and everything is fine.’ You would think this couldn’t possible happen.”

    “People ask me, ‘How do you put up with this?’ I have no choice,” Michael Negrea said. “It has cost us a fortune. We don’t make that much. But it’s our home.”
    ~~~

    Now, in terms of full disclosure of the precise facts…

    The Negrea’s loan was sold a few years after the couple qualified for it… to Nation’s Credit, and then it was sold to Homecomings Financial, with the loan being serviced by Fairbanks Capital Corp. In 2003, the Federal Trade Commission sued Fairbanks for deceptive and illegal practices, including not posting customer payments, and the company agreed to pay $40 million in damages that year.

    Apparently, while Fairbanks was in the picture for the Negreas, two of their mortgage payments didn’t get posted.

    The couple’s first foreclosure was filed in 2001 on behalf of Homecomings, which owned the loan at the time. Right around that time, the servicing of the Negrea’s loan was transferred from Fairbanks to GMAC.

    I don’t see how any of those facts make the least bit of difference here. GMAC has been servicing the Negrea’s loan since 2001 when the whole incredible nightmare began, and with it being 2011… GMAC has had all the time in the world to fix this and make it right.

    And, need I remind you that we… the taxpayers… paid $19 billion to BAIL GMAC OUT? Because, I suppose the story goes… they were too big to fail.
    ~~~

    In Conclusion…

    Well, our story has finally come to an end… for now, anyway. And understandably, the couple says they are drained from years of GMAC. If you ask me, it’s a miracle that Michael and Pam Negrea are both still alive… or that GMAC hasn’t blown up… or something else terrible hasn’t happened.

    But the Cleveland Plain Dealer story also says that the couple “is ecstatic that GMAC’s practices may finally be coming to light.” (And there’s that link I promised.)

    So… on that count, anyway… I’m sure as shootin’ here to help. How about you? Will you help this story get out? I’m thinking that you will…

    Oh wait… before you go, there’s one more thing from the story that I forgot to mention…

    “A representative for GMAC did not return a phone call seeking comment.”

    Mandelman out.
    http://mandelman.ml-implode.com/2011/01/gmac%E2%80%A6-payments-or-not-the-foreclosure-machine-that-just-won%E2%80%99t-stop/

  2. angry & NOT TAKING IT,

    Try the S-3 registration statement. May have to look under depositor — could be separate location on SEC site. Later– if you cannot find.

  3. A new trend gaining momentum: bank puts you on a dual track loan-mod/foreclosure system. Fight back and put YOUR bank on a dual track system:
    http://bryllaw.blogspot.com/2011/01/homeowners-response-to-banks-dual-track.html

  4. ANONYMOUS
    would this be in the psa ? sorry if this seems obvious!
    thanks

  5. angry & NOT TAKING IT

    Can be found — but have to dig deep..

  6. The only glitch is that the
    1- “servicer owns the tranche ” could these rules of the servicer be found in the “servicing rights” documentation ? could be problematic to get ; [ boooo!

    “that removes the non-performing loans.
    But, this tranche is not a pass-through certificate — it is an equity residual tranche.”
    2- equity residual tranche, how do we obtain evidence of the servicer owning this? would this “owner” equity residual tranche” be included with the purchased of the servicing right?
    hypothetic of course.

  7. http://www.scribd.com/doc/47282955/Norwood-v-Chase-Summary-Judgement-Against-Chase-and-Barret-Daffin

    CHASE DENIED MOTION FOR SUMMARY JUDGEMENT. THEY HAVE NO STANDING. THERE IS NO AGENCY WITH BARRETT DAFFIN.
    GOOD READING FOR THE PROPER WAY TO DEAL WITH THIS TRICKERY. THIS IS A NON JUDICIAL STATE.

  8. Ian

    I see foreclosures by Maiden Lane — for the “whole loans” it owns —it owns “whole loans” — which fed will not divulge due to privacy. Not a lot — but they are under — “Maiden Lane Asset Backed Securities I Trust 2008-1.”

    Have to remember, also, that Maiden Lane holds many remnant tranches (not paid swaps) – and the swap rights themselves – to many trusts, including Fannie/Freddie REMICs, that Bear Stearns purchased from other security underwriters who owned the certificates to their parent corporation’s SPV.

    vegasdude,

    Fannie/Freddie had many roles — including investing in the subprime BANK securitizations. How did that happen??? If insurance was involved — were there agreements of dumping of Freddie/Fannie loan ownership in exchange for investment in so-called bank MBS??? Much still out there. Need to open Fannie/Freddie books. How about it Mr. Barney Frank? Can YOU help??

  9. angry & NOT TAKING IT,

    Okay — but charge-off usually occurs after the securitization (removal of receivables from balance sheet – which is just an accounting coversion) — that is, the default loans are then removed from securitized trust (no longer a receivable) by servicer — and entity who securitized – gets write-off. Only receivables of promissory note is securitized – thus, once in default — no longer a security. . The only glitch is that the servicer owns the tranche that removes the non-performing loans. But, this tranche is not a pass-through certificate — it is an equity residual tranche. So – servicer THINKS they can cover-up for whoever is now collecting (and it is not the trustee to trust). Again, the role of the subordinated tranche is to REMOVE non-performing loans.

    Work that in –otherwise — good points.

  10. Brian,

    This wasn’t that 500+ page compliant that had alot of good evidentiary facts about the securitization, was it?

  11. Ian — thanks. That makes sense that the government would pay 100 cents on the dollar for trash. It’s OUR money, after all.

    What I see here in non-judicial Nevada is Fannie Mae “buying” the properties for the free “credit bid” when the sale takes place. So, the foreclosure proceeds from the Trustee on the Deed of Trust at orders from the “new” beneficiary. Often, MERS, the “nominee” for the ORIGINAL beneficiary, tries to “assign” its interest in the DOT….but naturally this is flawed, as all those “assignments” must say something to the effect of “together with the note….” which, of course, MERS has no interest in.

    But anyway, Fannie Mae becomes the “beneficiary” in this way….although quite often, this assignment is not recorded until AFTER the Trustee’s Sale, and sometimes, not until after the Trustee’s Deed is recorded.

  12. vegasdude-re govt ownership of loan pools-under the TALF and other credit facilities, the govt. gave the bank/entity 100 cents on the dollar for what were basically junk. Maiden Lane LLC is holding the Bear Stearns subprime and Alt-A (which is basically subprime) paper, some 30 bn dollars worth. As I don’t see any Maiden Lane foreclosures,I would guess that someone else is pursuing foreclosures in these pools. Bear Stearn’s EMC Mortgage and Encore Credit Corp are still in business in Ca and Tx.

  13. Hey, angry….great points! I think we’re getting closer all the time.

    But something I want to know is — exactly how does Fannie Mae (or Freddie Mac) become the “investor” on these loans? It’s long after the securitization, right? Does this government-sponsored (funded) entity come in and “buy” the loan out of the pool? (…probably for pennies on the dollar or something…)
    How can we best attack this? Fannie Mae is now showing up on a lot of loans as the “owner of the note” in reply letters from B of A, or on the MERS “Servicer ID” web page.

    I don’t trust this move at all.

  14. STATE CASE LOG.
    MOSES HALL NEARLY LOST ME THE ABILITY TO KEEP THE STATE CASE. IT IS WELL BELOW THE STANDARD OF CARE AND YOU MAY READ THE PROBLEMS HE HAD, SO BAD THAT THE COMPLAINT HE WROTE WAS STRUCK IN ITS ENTIRETY. I HAD TO URGENTLY SUBSTITUTE MYSELF BACK IN AND FIRE HIM. I HAD TO REDO A 4TH AMENDED COMPLAINT.

    I HAVE ASKED FOR MY MONEY BACK. HE WONT RESPOND. THE CASE LOG REPRESENTS HOW BAD HE DID AND THE STANDARDS HE SHOULD BE JUDGED. IT IS A CRIME THAT THERE ARE NOT MORE EDUCATED AND HONEST ATTORNEYS HELPING HOMEOWNERS. IT IS A SAD DAY. THE REAL PROBLEM IS THAT I KNOW HOW BAD IT WAS AND THERE ARE MANY WHO ARE LIED TO AND DECIEVED AS TO THE WORK PRODUCT. MOSES HALL ONLY DID MY 3RD AMENDED. THANKFULLY MY FOURTH IS FILED AND SERVED AS PLAINTIFF IN PRO SE

    http://www.scribd.com/doc/47269253/INC090697-Case-Report-Indio-Civil-amp-Small-Claims-1-20-11

  15. http://www.scribd.com/doc/47269880/Mbia-v-Residential-Funding-Company-Gmac-Amended-Complaint-03-19-2010
    NICE AMENDED COMPLAINT AGAINST RFC [GMAC] FOR VIOLATION OF THE REPS AND WARRANTIES CLAUSE. THESE INSURANCE GROUPS LIKE MBIA AND RADIAN WERE LIED TO AND SCAMMED. THIS COMPLAINT IS GOOD AND IT COVERS MY SECOND NOTE TRUST HOME EQUITY LOAN TRUST 2007 HSA 2, DONE BY RESIDENTIAL FUNDING CORP, AND FILED TO CONFUSE BY USING RFSMII 2007-HSA2. THESE SCUM BAGS USED ALL SORTS OF NAMES TO HIDE. DANIEL EDSTROM FOUND MY LOAN LEVEL FILE ON THIS ONE AND IT SHOWS TROUBLE FOR THE SECOND. ONE MUST GET RID OF THE FIRST AND SECOND SECURITY INTEREST AFTER THE TRUSTEE ABANDONS THE CLAIM BY FILING 2 ADVERSARIES OR BY DOING THE FIRST AND FILE A 13 FOR THE SECOND. I PREFERR THE SECOND ADVERSARY.

  16. MyThreeSons@marketticker
    http://market-ticker.org/akcs-www?post=177827#discuss
    reveals what M Soliman has tried to explain here many times, and he was RIGHT & it is IMPORTANT to know … So the question is why banks or lenders do not make the truthful EQUITABLE argument of the obligations, hmmm because they would fail & oops the goes the security??

    “the creditor no longer exists when a note becomes securitized. Why? Because the debt has been charged off the creditor’s balance sheet in order to capitalize the certificates of the investment trust. In other words, the note was tendered for other consideration (certificates). When a debt instruments inherent value is divested and transferred into another form of marketable security (stocks certificates, bond certificates)the note is destroyed. Both instruments can’t exist at the same time for the same debt. The charge off the creditor’s balance sheet has exinguished the debt.

    Its called derecognition according to GAAP. Tender of the note for other condideration alleges the note is REGISTERED into another recognized marketable shape or form. Generally, when a security instrument is transferred,the transferee will deliver the endorsed instrument to the issuer or its transfer agent, who in turn will issue a new certificate in the transferee’s name. UCC article 8 mandates that the issuer REGISTER the transfer. So an issuer of a promissory note that is found to be a security instrument will be obliged to REGISTER the transfer and issue new notes/securities upon a transferee’s request. Guess what entity serves this purpose? If your loan has a MIN#, your note has been divested.

    So as you can see, there is no note anymore by operation of law. Moreover, there cannot be an agent of nominee granted a capacity to enforce the note. Because the note has been divested and is essentially worthless, the banking interests had no incentive to meticulously archive them. This is why so many lost note affidavits have been used in the foreclosure process. Would-be-creditors have furiously attempted to reverse engineer the securitization process using robosigners and fake documents. All of that is futile because an accounting audit would reveal the destruction of the note and the charge off the creditors balance sheet. The only way a would-be-creditor recaptures the liability is to fraudulently credit bid at foreclosure auction but actually fund the bid with a loan. That would re-establish a basis in the asset and put it back on the balance sheet.

    Without knowledge of the creditors identity,the debtor has no way to investigate this. The servicing rights are sold seperately to a debt collector as if the debt still exists, the debtor non the wiser.

    creditor = the entity that accounts for the debt on its balance sheet.

    Mers = securitization

  17. And, who is going to sign the new false affidavits?? Another employee of the servicer?? Servicer is not the plaintiff – cannot attest to the validity of anything..

  18. Louise,

    Agree too — And, affidavits cannot state an “intent” to do something now – that was never done in the first place.

  19. @LOUISE…I AGREE

  20. Why did they agree to drop the class action law suit?

  21. GMAC says it will refile. They cannot refile if they have fraudulent documents as the basis of their suit. In addition, they need to prove they actually own the loan. Can they prove that they actually own the loan? I do not think so. It will be very interesting to see what, if anything, is refiled. Burmese8@yahoo.com

Leave a Reply

%d bloggers like this: