Ohio AG Suing GMAC on Foreclosure Mess(Seeks $25,000 Per False Affidavit)

[Robbien]

Source: Mother Jones

In 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

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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 . . .

[PoliticAverse]

1. US Taxpayers own over 56% of Ally Financial.

http://www.ally.com/help/investor-relations.html

"In May 2009, GM and FIM Holdings (Cerberus) each significantly reduced their ownership in GMAC (now called Ally Financial), which was required in connection with GMAC’s conversion to a bank holding company in December 2008. As of December 31, 2009, the ownership of Ally common equity was as follows: GM 6.7%; GM Independent Trust 9.9%; US Treasury 56.3%; Cerberus 14.9%; and Cerberus Co-Investors 12.2%."

[ChairmanAgnostic]

2. the key is the wake up call to judges

and defendants in every jurisdiction.
All of a sudden, these slam dunk cases don't seem so slamming anymore.

Add the MERS problem (which is another HUGE potential pitfall for mortgage holders), and this whole business stinks to high heaven.

[PoliticAverse]

3. lawsuits are nice...

but if crimes have been committed where are the criminal complaints and arrests?

[Robbien]

4. Our Dept of Justice doesn't believe the rich and powerful are subject to the law

so filing civil lawsuits are all we have left. And even that right is much restricted these days.

[FedUp_Queer]

7. Let's step back here

First, let's step back here. There is nothing saying that criminal complaints and perp walks are not coming. However, if the point is to invalidate "foreclosures" and make whole (as much as possible) the true homeowners, a lawsuit is the way to go. In fact, from the press release, see this paragraph:

Through the lawsuit, Cordray is asking the court to grant a preliminary and permanent injunction preventing GMAC/Ally from proceeding to foreclose in any pending Ohio case or allowing the property to be sold. Cordray is also asking for civil penalties of up to $25,000 for every violation of Ohio's Consumer Sales Practices Act and for consumer restitution.

The whole press release here: http://www.ohioattorneygeneral.gov/Briefing-Room/News-Releases/October-2010/Attorney-General-Cordray-Files-Lawsuit-Against-GMA

Going this route stops foreclosures PERMANENTLY in any pending case (if they win that point). In addition, the AG is seeking restitution for each consumer. Also remember that the burden in a civil suit is lower. The AG only has to prove by a preponderance of the evidence (which is essentially more likely than not), as opposed to, beyond a reasonable doubt (in a criminal case). Now, if this case gets to a jury, what do you think an Ohio jury will do? Even if the case settles, which is a possibility, the AG can then go after the company, the "robo-signer" and anybody else who knew. I think the AG is going the lower burden civil route first as a tactical maneuver to build momentum for a criminal case. Then, if after discovery in the civil matter, the "writing is one the wall" so to speak, watch the employees come out of the woodwork and start squealing. This may be the way to get at the people at the top, as opposed to some low-level underlings who were "just following orders." We want the order givers in this case. The bottom line is this: the first order of business should be to make the consumers whole (as much as possible) and then go after the company and its employees and executives criminally.

[dixiegrrrrl]

5. Sadly MERS foreclosures continue to this day here, in a non-judicial state.

Tho I suspect if people here were more aware of the problem, they would exercise their right to go to court.
Unfortunately, even if the foreclosure process here is due to lack of payment, MERS is still using illegal assignee process to do it, and I notice there are 2 law firms doing 80% of the foreclosue filings for MERS, a sign of
foreclosure mill at work, as outlined so nicely in Zero Hedge, 4closurefraud, etc.

[dixiegrrrrl]

6. Ha...that lawsuit also enjoins any foreclosure involving MERS.

THAT makes me happy.

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