Ally disputes charges that another GMAC employee 'fabricated and changed title' in foreclosure cases
A South Carolina attorney is alleging more wrongdoing against homeowners facing foreclosure by Ally Financial's GMAC mortgage unit.
In a letter to a state trial court, Robert Rikard accused Judy Faber, a woman who identified herself as a GMAC vice president, of having "fabricated and changed the title in thousands of foreclosure cases."
Ally spokesman James Olecki responded that Faber "holds a completely different role than those in the foreclosure team and has no involvement in the foreclosure process."
He reiterated that the company is "confident" that the processing errors the company previously described (which have nothing to do with Faber) "did not result in any inappropriate foreclosures and that the substantive contents of the affidavits in question were factually accurate."
Faber, who is not named as a defendant in the South Carolina case, was the owner of a stamp that was used to authenticate the transfer of titles. In a deposition in Alabama, she said she was a vice president and director of a residential funding corporation in addition to being a GMAC vice president.
Whether these stamps were used legally is critical in foreclosure cases. To foreclose on a house, a lender needs to not only prove that the homeowner is in default but that the company owns the mortgage.
In case after case, "these stamps are all undated and not notarized, and they magically appear when a foreclosure plaintiff needs to prove chain of title in a case," Rikard said in a phone interview.
Lawsuits recently uncovered that a single employee of the GMAC mortgage unit, Jeffrey Stephan, signed off on 10,000 foreclosure papers a month without checking whether the information justified an eviction.
"What we're finding over and over," Rikard said, "is when a foreclosure gets challenged, the plaintiff doesn't actually own the note. If you can't comply with the law, you can't take people's houses."
Yves Smith on Naked Capitalism explains why this is important.
Complete coverage in The Washington Post:
Sept. 20: Ally suspends evictions on foreclosed homes in 23 states
Sept. 21: A single Ally employee, Jeffrey Stephan, signed over 10,000 documents a month without reading them
Sept. 22: Fake documents, forged signatures plague foreclosure system
Graphic: 'Robo-signer' Linda Green's changing signature
Who is Jeffrey Stephan anyway?
Sept. 23: Mortgage documentation problems could affect other states not included in Ally's 23-state moratorium
Sept. 24: Lawmakers question Fannie on 'foreclosure mills'
Ariana Eunjung Cha
| September 27, 2010; 5:01 PM ET
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