In one trial I’m familiar with, but not one of these 23 states listed, the GMAC guy was on the stand twice, and the second time, it was pretty clearly established that he had perjured himself in his initial testimony. But I doubt the mother ship took note of that trial (no verdict rendered yet). However, to put it politely, there was pretty clear evidence of document forgeries; the only question which party (GMAC or its law firm) was responsible.
From Bloomberg (hat tip reader Scott):
Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt evictions tied to foreclosures on homeowners in 23 states including Florida, Connecticut and New York.
GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 marked “urgent.”….Brokers were told to immediately stop evictions, cash- for-key transactions and lockouts, according to the document, addressed to GMAC preferred agents.
Following is a table of the affected states.
Connecticut
Florida
Hawaii
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Nebraska
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
South Carolina
South Dakota
Vermont
Wisconsin
19 comments
Comments are closed.
So is this likely to be related in anyway to the JPM case from a week or so ago? The one where the Judge said JPM was committing fraud by foreclosing on properties for which it did not hold the note?
That’s this story, I think.
http://theintelhub.com/2010/09/17/wall-street-banks-committing-widespread-mortgage-foreclosure-fraud/
Yves, clearly you are an alarmist and this is an exaggeration. LOL.
Does this mean that some or all of the foreclosures that have already occurred may need to be revisited?
Does it mean that people who bought a foreclosure will have to give it back?
I wonder if those who were illegaly foreclosed on can sue for pain and suffering.
Geez, how will this mess ever be resolved?
This sounds like the blackest of black swans ever imagined.
No.
It means Ally is concerned that it has left itself open to major legal liability.
Could a buyer of an REO ever have to return a property to the bank that sold it? Yes. And they would get their money back plus, if they negotiate competently, a payment in compensation for opportunity costs, etc.
Roughly comparable situations also happen in non-judicial foreclosure states, in which the foreclosed houses are sold at trustee auctions. In most cases the lender is the winning bidder and the house becomes REO, and is then held for a while as the lender dribbles the REO out into the market. But in cases in which a 3rd party buys the house at trustee auction, it occasionally happens that the foreclosed upon owner shows up with good cause to revoke the foreclosure. In those cases the buyers can and often do join forces with the foreclosed upon party and they get compensation from the bank – most often by negotiation, but by lawsuit if necessary.
Buyers should always check title and factor in title risk. But there is recourse if title proves bad.
Does it mean that people who bought a foreclosure will have to give it back?
BFP?
Yves,
This is the real MERs problem. The fact that Ally stopped its REO sales as well as its foreclosure proceedings shows that it is concerned (as well it should be!) about legal liability for REO houses it might sell with bad title . . . especially since it knows it might have bad title.
Buyers of REO properties do have legal recourse in such cases (re your earlier post about Wells Fargo, in which you said there was zip, zero, nada recourse to get a buyer’s money back).
You’ve both blatantly misrepresented what I said in the last post, and also either failed to read the addendum referenced there or choosing to misrepresent it. And in the last thread, you incorrectly accused me of errors and misreporting what I was told. This is repeated unacceptable conduct.
You’ve also been given extensive rebuttals of your theories on the last thread, which you failed to address, and you’ve been asked if you represent certain parties, and you’ve been notably silent.
You go girl, I love you.
I believe this action relates to thousands of false affidavits filed by an officer of GMAC Residential Funding. It is also my understanding that this particular officer may be facing a multitude of federal and state criminal charges. As of this date, thousands of foreclosure affidavits have been withdrawn in Florida and a number of notices of false evidence have been filed by the mill law firms with the Florida trial and appellate courts. This, in my view, is the tip of the iceberg!
O. Max Gardner III
Yes sirree O. Max, very deep in the soup they are.
So how does it play itself out , in your estimation.
I’m not a Lawyer but having been in a few Rodeo’s, I’ve learned where an agreement is unclear, Judgement is in favor of the person who didn’t write it.
In this square dance is it the Banks, Fannie Mae or Wall Street who will take the hit?
Will the Courts follow the Rule of Law or will they rule in favor of what protects the Banks. Wall Street, etc.
I am wondering if this applys only to GMAC or FMAC Motgages?
It means that both parties (wrongly foreclose and foreclosure buyer) each have a cause of action against the party that foreclosed. In my state, the only time you can get emotional distress is when the case deals with your home. In this case, that would be both parties. My knee jerk reaction is that this is going to be fun – in a sick sort of way. Maybe TBTF means Too Big To Flee?
Stealing a car or stealing a house is the same crime, just different dollar values. At some point, AGs, DAs and the Justice Department (not) will figure this out. Even if the criminal is a very sophisticated bank or servicer, or processor.
“It means that both parties (wrongly foreclose and foreclosure buyer) each have a cause of action against the party that foreclosed.”
Exactly right.
If this is really going to hit the poopy fan it will come when a politician of sustantial status has to give back screaming-deal foreclosed property that was leveraged with (ahem) “creative” interest rate and down payment accomodation much less superfluous title ‘searches’.
Holy crappola. That could mean at minimum 3/4th’s of Congress at large could soon be up in outraged arms over this debacle.
Cough.
THE CURSE OF MERS!
http://stopforeclosurefraud.com/2010/09/20/gmac-mers-steven-j-baum-pc-the-court-is-at-loss-on-a-purported-corrective-assignment/
http://stopforeclosurefraud.com/tag/gmac/
You know that they can’t put foreclosure on hold in Super Lien states right? So, off the top of my head, FL, CT, IL, PA, NJ, CO, NM, NY, VT are Super Lien. These are states that your foreclosure can be brought by mechanics liens and HOAs as well as other debt holders. Also, this is going forward, so if your property is already been signed off on, it will not be stopped. They just will take their time to initiate new foreclosures.
The late Christopher Story published an article back in December, 2007 with regards to the fraudulent nature of the mortgage contract.
http://www.worldreports.org/news/108_subprime_slide_that_masks_fraudulent_finance
I should know, because I ghost wrote it, and Chris edited it. I am NYC based, 35+ years finance experienced, spent decades on Wall Street … and I approve this message.
Signed,
SJ