This week, GMAC Mortgage Co. halted foreclosure sales and evictions in 23 states, including Florida, after it was revealed that affidavits were signed by individuals who had no personal knowledge of the information contained in the documents.
GMAC used what are known as robo-signers, people who sign thousands of documents, assignments and affidavits that establish a bank’s ownership of a mortgage. This establishment gives the bank the right to foreclose.
However, a robo-signer with GMAC admitted in two sworn depositions that he signed as many as 500 documents a day. Some months, he signed more than 10,000 documents related to home foreclosures. When he signed the affidavits, he was confirming that he had personal knowledge of the details of the case. However, he admitted that he rarely had reviewed the case. Instead, he said he assumed that all of the details were correct. The employee stated that he received three days of training from GMAC.
GMAC confirmed that it suspended evictions and foreclosure sales while it investigates its procedures. Ally Financial Inc., GMAC’s parent company, released a statement, calling the situation “unfortunate” and “regrettable” and vowing to resolve the situation.
This is not the first cause for concern. There have been questions about the practices of many other banks as well. For example, a woman working as an operations specialist for Chase Home Mortgage, a division of J.P. Morgan Chase & Co., admitted to signing 18.000 foreclosure documents each month without once reviewing the cases.
A professor of real-estate finance at George Mason University suggested that judges may not accept foreclosure filings if there are any questions about the documents’ accuracy.
Source: The Wall Street Journal “GMAC Spotlight on ‘Robo-Signer’” 9/22/10
