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Mother JonesIn the latest on the foreclosure front, Ohio Attorney General Richard Cordray announced today a suit against GMAC Mortgage, the loan servicing subsidiary of the bank Ally Financial, for "fraudulent practices potentially involving hundreds of Ohio mortgage loan foreclosures." Here's the press release from the Ohio AG's office:
Last week, Cordray sent a letter to Ohio judges requesting that the state courts make special review of all foreclosure cases that involve GMAC Mortgage. The letter was sent in response to recent reports of questionable affidavit procedures by the large loan servicer. It appears that affidavits were being signed en masse, and that those signing them were attesting to having personal knowledge about matters that they in fact knew little or nothing about.
Cordray's announcement is the latest in a flurry of actions against GMAC and other major mortgage companies throughout the country, all stemming from servicers' use of bogus legal filings to foreclose on homeowners. (A fuller description of that mess is here.) More than half a dozen state attorneys general are investigating major financial players like GMAC, Bank of America, and JPMorgan Chase. Some banks have ordered moratoriums on foreclosures in their states until the paperwork debacle is settled, while AGs and members of Congress have demanded more foreclosure freezes. Read more on that here.
In his official announcement, Ohio's Cordray said, "We know that as Ohioans were fighting to save their homes, this loan servicer benefited financially from the dire circumstances. Instead of stepping up and assisting those at risk of losing their homes, it is clear that GMAC chose to compound the problem through fraudulent and unfair and deceptive practices."
Read more:
http://motherjones.com/mojo/2010/10/ohio-attorney-general-gmac-foreclosure
Another article:
http://news.firedoglake.com/2010/10/06/ohio-attorney-general-sues-gmac-seeks-25000-per-false-affidavit/This is big news. I just got off a conference call with Richard Cordray, the Attorney General for the state of Ohio. He has filed a lawsuit in Lucas County (Toledo) Common Pleas Court against GMAC Mortgage and their parent company Ally Financial, in a suit which names Jeffrey Stephan, the infamous “robo-signer” who signed off on up to 10,000 foreclosures a month across the country with affidavits, without verifying the information in the foreclosure documents. The lawsuit alleges fraud on the part of GMAC, along with violations of the Ohio Consumer Sales Practices Act, in filing false affidavits to mislead the courts in what they describe as “hundreds” of Ohio foreclosure cases. And, the Attorney General is treating every single false affidavit filed in an Ohio court as a separate violation, with a fine of up to $25,000, plus additional restitution for the homeowner of an unspecified amount.
This is a major lawsuit, and as Cordray told reporters, “We’re at the beginning of this, not the middle or end, and we’ll see where it leads us.” For context, approximately 450,000 foreclosures have been filed in Ohio since 2005, and potentially all of them used this robo-signing process. At the outer edge of this, if every one of those foreclosure processes is seen as a single case of fraud, the fines for the entire lending industry would add up to $11.25 BILLION dollars, just in the state of Ohio, not including the extra restitution for homeowners.
I don’t think that’s necessarily going to be the end result of this, but for the moment, Cordray is suing GMAC, and all he has to prove is that the lender knowingly presented false affidavits and false documents to the court. Even the hundreds of cases he suggested GMAC committed fraud in would amount to a significant fine.
much more . . .