An incredible number of borrowers may be rescued by illegal foreclosure paperwork

Foreclosure documents prepared by Ally Financial used to take homes and evict people was submitted to courts without verifying their reliability. Without reading documents or having a notary present, about 10,000 property foreclosure documents a week were signed by one Ally Financial employee. In 23 states, evictions of homeowners were suspended by the fourth largest mortgage company within the United States of America, Ally Financial, because of this. Other companies–including Fannie Mae and Freddie Mac–who used Ally Financial to process foreclosure documents may also be affected. What Ally Financial has done makes it possible for millions of American homeowners to fight their property foreclosure with a court case.

Forgetting to verify the foreclosure documents

Forgetting to verify before foreclosing on a family is getting mortgage lenders in trouble. There have been a lot of accusations going around. Head of Ally’s foreclosure document process Jeffrey Stephan admit in a sworn statement with families trying to keep their homes, says the Washington Post, that he had no notary present as he signed the documents without reading them. Notarization was supposed to happen after Stephan signed them. He would sign about 10,000 a month and send them off. The Post explains that Stephen was only spending 1.5 minutes on each document. That is calculated by assuming he was working eight hour days. In court, the documents were still used by “foreclosure mills,” or simply a law firm. The firms wanted to evict individuals so the banks could sell to someone else.

There are nevertheless cases in court with mortgage lending abuse

The housing crisis and foreclosure epidemic happened because of abuses within the mortgage lending industry. These are nevertheless affecting other things that happen. The Wall Street Journal reports the courts are struggling with complex paperwork on millions of mortgages that have been packaged, chopped up, scrambled and resold to investors as securities. The business that owns the mortgage is a mystery. Courts cannot figure it out easily. Foreclosure documents are meant to help that a bit. They should clarify. Numerous banks that are foreclosing have the very same problem of not knowing who the loans belong to with Stephen, who has been called a “robo-signor,” and “affidavit slave.”

A legal gift is given to in foreclosure process homeowners now

In the last few years, Ally Financial has been putting out illegal foreclosure paperwork. Now, Wall Street banks may start having problems with all of the doubt from the last few years of foreclosures. Foreclosures may start being challenged more often. Homeowners have a reason why the foreclosure may not be right now. Federal rules of civil procedure, claims Andy Kroll at Mother Jones, show that what Stephen was signing “must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant is competent to testify on the matters stated.” Stephen was designed to read the documents in detail before signing off on them. Before he signed them, he had to be familiar enough with their contents to defend them in court.

Further reading

Washington Post

washingtonpost.com/wp-dyn/content/article/2010/09/21/AR2010092105872.html?wpisrc=nl_pmheadline

Wall Street Journal

online.wsj.com/article/SB10001424052748703989304575504142243174842.html

Mother Jones

motherjones.com/mojo/2010/09/gmac-foreclosure-stephan-halt