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GMAC Foreclosure Fraud The Story Broadens and Deepens… Fannie Mae Knew and Still Uses Foreclosure Mills

25 Sep

Oh, GMAC – this is getting a little deeper now, isn’t it -going back to … 2006???

This is certainly something that we need to stop and look at – for all that GMAC says ‘nothing to see here’.

GMAC Told Freddie of Improper Affidavits Weeks Ago; Frank, Grayson, Brown Write “WTF” Letter

from naked capitalism by Yves Smith

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It isn’t surprising that given the potential consequences (revelation of widespread fraud, improper foreclosures, and big time difficulties straightening out the mess revealed), GMAC and other servicers have taken the “nothing to see here, drive on by” approach to reports that they forged affidavits and fabricated documents in order to be able to show courts the right sort of documents required to foreclose. Note there are depositions as far back as 2006 showing that GMAC was using improper affidavits, yet only when pressure has started to rise substantially (more lawsuits challenging standing of the party foreclosing; actions and increased interest by state attorneys general) has GMAC ‘fessed up to its main client (see here and here for more background on this story).

That means it was continuing to evict people even though its procedures did not comply with the law. Submitting false affidavits is a fraud on the court. And as we indicated earlier today, the false affidavits are symptomatic of far more serious problems with foreclosure proceedings when the mortgage is owned by a securitization entity.

Per Bloomberg:

Ally Financial Inc.’s GMAC Mortgage unit told Freddie Mac that foreclosures by the auto and home lender might have been faulty weeks before halting its own evictions, according to two people briefed on the matter.

Ally informed Freddie Mac on Aug. 25 that affidavits for court proceedings might not be valid, according to a person with direct knowledge of the matter. By Sept. 1, Freddie Mac had notified its network of lawyers and stopped related foreclosures and evictions, said the person, who declined to be identified because the matter hasn’t been formally disclosed. GMAC told agents to halt evictions in 23 states on Sept. 17.

Barney Frank, Alan Grayson, and Corrine Brown sent a nastygram to Fannie’s CEO and threatened hearings:

September 24, 2010

Michael J. Williams
President and Chief Executive Officer
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, D.C. 20016

Dear Mr. Williams,

We are disturbed by the increasing reports of predatory ‘foreclosure mills’ in Florida working for Fannie Mae servicers. Foreclosure mills are law firms representing lenders that specialize in speeding up the foreclosure process, often without regard to process, substance, or legal propriety. According to the New York Times, four of these mills are both among the busiest of the firms and are under investigation by the Attorney General of Florida for fraud. The firms have been accused of fabricating or backdating documents, as well as lying to conceal the true owner of a note.

Several of the busiest of these mills show up as members of Fannie Mae’s Retained Attorney Network, a set of legal contractors on whom Fannie relies to represent its interests as a note-holder. The network also serves as a pool of legal talent that represents Fannie in its pre-filing mediation program, a program designed to facilitate communication between borrowers and servicers prior to foreclosure. In other words, Fannie Mae seems to specifically delegate its foreclosure avoidance obligations out to lawyers who specialize in kicking people out of their homes.

The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note. This practice is blessed by a legal system overwhelmed with foreclosure cases and unable to sort out murky legal details, and a set of law firms who mass produce filings to move foreclosures as quickly as possible. At the very least, we would encourage you to remove foreclosure mills under investigation for document fraud from the Fannie Mae’s Retained Attorney Network. We also believe that Fannie should have guidelines allowing servicers to proceed on a foreclosure only when its legal entitlement to foreclose is clearly documented. In addition, these charges raise a number of questions for us about the foreclosure process as it pertains to Fannie Mae’s holdings.

Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes? Given that Fannie Mae is at this point a government entity, and it is the policy of the government that foreclosures are a costly situation best avoided if there are any lower cost alternatives, what steps is Fannie Mae taking to avoid the use of foreclosure mills? What additional steps is Fannie Mae going to take to ensure that foreclosures are done only when necessary and only in accordance with recognized law? How do your servicer guidelines take into account the incentives for fraud in the fee structure of foreclosure attorneys and others engage in the foreclosure process? What mechanisms do you employ to monitor legal outsourcing?

We look forward to your responses and to understanding more about these disturbing dynamics in future hearings.

 

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  1. Richard

    October 13, 2010 at 12:06 pm

    I am very concered about those people who may have alreadly lost their homes illegally, with this fraud. Will they have an avenue to file a law suit?

     
  2. Julie Jackola

    October 30, 2010 at 6:42 am

    GMAC instructed me to be two months behind 2/2009 in order to qualify for Obama’s Surplus plan when I was struggeling from my husband’s brain tumor, his sister using her power of POA to take everything we worked over 20 years for and put into a Trust & Will, etc. When I called back two months later to get started I was told that I had to be current in order to qualify, and found I was in foreclosure because of this advise 6/15/2009 with an auction date of 7/15/2009. They wouldn’t help me and continued to give me bogus numbers of so called attorneys. When I threatened law suit I got a local number for their attorney 4 days before my auction date only to find out my home wasn’t in foreclosure, therefore isn’t up for auction. Now I’m 6 months behind, and can’t get a loan for my life even with a 76% equity cushion. When I received the reinstatement amount for the foreclosure that wasn’t in foreclosure, I was charged for attorney fees, pulication fees, certified mail, etc. that didn’t occur. They kept me hanging on the belief that they would work out a modification loan, while sceduling another auction date without notifying me. I literally filed a petition in my last hour or Chapter 13 to save my home because GMAC wouldn’t back up their word on postponing the auction. 3 months after my Chapter 13 GMAC filed to be dismissed because they claimed I never made any payments. That cost me over $2,000 to show the court proof of payments, lost of job, lost my renters, lost my mind. Every month they hold a auction only to hand out the specifics of my property claiming the auction was postponed until the next month. I constantly have predators knocking on my door, asking neighbors questions about me, putting “I will buy your home” in my mailbox. My note is $88,000, Market Value is over $600,000, and I put $200,000 cash down, over $70,000 of improvement doing all the work myself, and 9 years of payments. I can’t get a loan for $1 because of GMAC, what started out as $600, has costed me over $30,000 now. Every day of every month I’m afraid. All I have is my home, and GMAC is trying to wear me down until they take my house. I had Helping Hands try to work with GMAC regarding a modifications, only for my advocate to see what I’ve been put through. 1 1/2 hours later, 7 people later, 7 deliberate hangups, and ignored giving me help.

    GMAC knows from my hardship letter that my boys and I lost everything due their father’s illness and family, and all we have are each other with no one else to turn to. So they know it’s just a matter of time until I will fall, with the constant threat, worry, further and further in debt, and to get a good job I don’t appear to be a good candidate credit. I can’t tap into my $400,000+ equity, get a loan, second mortgage, refinance, etc.

    But I started a job today, and am seeking the best attorney around to go after GMAC and make them pay me for all the suffering and loss that they caused me. I didn’t hear or now about mortgage lenders being able to be dishonest until I was already caught. There’s no Obama Surplus plan, there’s no one who will help you make your mortgage lender modify your loan. It’s all bullshit. So, I’m going to pound on every door until I make GMAC accountable for all my loss. I was smart enough to make a time-line with names, dates, times, promises, etc. With documentation of their amount I owe being different always. I also will sue for all I had to sell, loose, jobs, renters, health issues, weight loss down to 96 pounds, my sons being afraid to see me because they can’t handle seeing me go down and lose everything after they saw their father go through the same last year. All they know is what they see on the internet that my home is gone every month by auction. I’ve clawed my way back, and know that I will come out on the top, and hopefully help many others who don’t know what else to do from fear and no help.

    So anyone who is reading my story, I’m from Kailua, Hawaii, my name is Julie Jackola, and please contact me for any advise, questions, etc. Now that I’m back on my feet, boxing gloves on, and recovered from all that I allowed by believing in what others tell me, it’s my turn to tell my story and take back what was taken from me in every aspect.

    I’m very smart, very strong, and will not ever allow anyone or anything to hurt me or my boys again. I have morals, values, ethics, always been a survivor, but just don’t believe what I’m told. Predators are all around us, on the news, internet, TV, newspapers, etc., yet nobody is held accountable, only those of us who believed what we were told to be the truth.

     
  3. Julie Jackola

    December 9, 2010 at 7:20 am

    For almost 3 years I fought our system here in Hawaii that doesn’t stand by the laws that are written. My ex-husband of 20 years was diagnosed with a brain tumor 2 years after we split up. His sister took over his affairs, and literally “took” everything, leaving him without, and is now living in the home that was in a Trust & Will for our two boys. We worked all our lives, and earned everything we had. She has never worked, with her children in & out of jail. They are getting away with this because no one cares. He was kidnapped from us in order to revoke me as POA, then my boys and I were served with TRO’s so they could empty the house of everything my boys had. They were also the payee for his social security. For almost 2 years no one saw my ex, including his doctors, until he was admitted to the hospital expected to die. Still adult protective services, HPD, family court, etc., have done nothing. GMAC was fully aware of my hardship because I was asked to give a reason when I would call about my mortgage payment being late. 2/09 when I inquired about qualifying for one of Obama’s Surplus plans, I was told I had to be two months behind. When I called back in May to get started, I was told that I had to be current. When I called June 17 to see what was up with my loan modification, I was told that my home was in foreclosure June 1. When I asked how, I was told that my May payment wasn’t applied to my account because I didn’t include the late payment, making me 3 months behind, and that they couldn’t answer any of my questions, giving me their attorney to contact. For over a week I got an answering machine with no returned calls. I received a call June 30 informing me my home was up for auction July 15, and I had to fax a request for my reinstatement information. I had to send my boys to live with family of their friends, and was ready to roll-over from losing all we worked for, and my boys without a home. From a push of a wonderful friend, we found that my home was never in foreclosure, no auction, and all the stories we all lies to take my home. Two days after I was able to confirm my home wasn’t in foreclosure, I received the reinstatement with more then half of the amount being costs that didn’t occur. My note is $88,000, market value $500,000+, yet I was unable to obtain a loan from appearing to be six months back in payments from GMAC’s stunt, still unemployed, and truly wouldn’t of been able to work if I was offered a job from the stress, worry and constant fear and pain. In two weeks I converted half of my home into a rental, with Jan 1 having $1,300 a month rental income, and started full-time Jan 4 making $2,400. And still GMAC kept me hanging regarding my loan. I discovered my home was to be auctioned February 6, 2010, never notified, and still left hanging. I’m in the week before my auction and was told that they would postpone the auction, but I never could get it in writing. A stranger from the internet answered my cries for a loan, and when I started to explain my story, he stoped me and told me I have do as he tells me, or my home would be gone. He instructed me find an attorney who was still in his office to file a petition for a Chapter 13. I was literally in my finale hour to keep my home, otherwise GMAC would of left me and my boys in the street by deceiving us and knowing our story. Every month they advertise my home up for auction which causes me hardship with employment and renters, waiting to wear me down to take my home over $8,000. In May they asked to be dismissed claiming never made a payment. I went to court to prove their lies, costing me my job from the stress, and was charged $2,000 for their unlawful act. What has happened to our world. How is GMAC, who is required to help people in hardship from being bailed out themselves able to do this over and over. There’s no government help. And the only ones who suffer are the people who live by doing what’s right. A year’s gone by and every day I live in fear, and without my boys. I’m feel like we are all being set-up by the government. What the hell is going on that the laws are broken and nothing is being done. I feel that the only way to survive is to break the law and not get caught. I’m in the process of writing a book, with the hope that all my family has lost will be given back to shut me up. I truly believe that our government set us up with a false recession so the fat cats can scoop up the stocks and real estate so we can fight more wars. How is it that every day someone is telling my story and nothing is done. I believe I’m not alone when the good guys start doing what they must to survive. If GMAC takes my home, my life, I will be heard.

     
  4. Steven ross

    December 22, 2010 at 12:51 pm

    Julie, Simple , Sell you home to a friend or relative.
    They get new loan on their credit. you make the payments while sueing GMAC in small claims for 1 of your fees back. to $5,000? Once you win that case,
    You file again for next fee, or give to lawyer to get more. if this is legal in your state.
    Your situation is unique as you still have equity, most people don’t have equity only debt. You have better options than most people. or sell and pay all cash for a smaller place so you have no payments, Hope it works out for you.

     
  5. Rayan

    December 22, 2010 at 6:26 pm

    Julie, I am so sorry you are going through this. I hope that things will work out for you. If I could help you keep your home, I would. It’s a difficult time for everyone but living with the threat of losing something you’ve worked so hard for – your security – must be horrible to endure. Sending prayers for a miracle! Aloha