GAMC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York. While GAMC disputed the characterization that the move was a foreclosure “halt”, insisting that residential foreclosures were moving forward it did acknowledge that it was dealing with a “potential issue” that was raised in some existing foreclosure proceedings dealing with “judicially required forms.”
The “potential issue” in the “judicially required forms” were fraudulent affidavits executed by an attorney named Jeffrey Stephan. Stephan works with, among others, the Florida Default Law Group, a collective that developed a rapid-fire response to foreclose on residential properties on behalf of lenders.
It turns out, hundreds of thousands of foreclosures happened as a result of falsified evidence, a fact GMAC and other lenders are now forced to admit as the actions of its attorneys come to light.
In the affidavits at issue, which the Florida Default Law Group has filed notices to withdraw, Stephan claimed to have “personal knowledge” of the facts of thousands of foreclosure actions. Yet as the actions of the Florida Default Law Group and Stephan gained closer scrutiny, he admitted, in sworn deposition testimony that he really had no personal knowledge of anything he swore to in those affidavits.
Stephan also admitted that the fraud was far-reaching in that he signed as many as 18,000 foreclosure affidavits per month. Not all of those cases are still active. In fact, many of those cases have gone to sale, meaning that hundreds of thousands of families have been rendered homeless due to falsified evidence on behalf of mortgage lenders.
Rep. Alan Grayson (D-FL) has asked the Florida Supreme Court to halt all foreclosures involving the Florida Default Law Group and related firms accused of document fraud. Newly-appointed consumer advocate Elizabeth Warren has long championed for tougher measures to protect homeowners from the continued predatory practices by the banking industry. Now it’s clearer than ever just why those reforms are needed.
photo courtesy of respres via Flickr
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