My client forwarded a letter they received from GMAC MORTGAGE, dated May 14, 2012 and requested that I share this information on my blog: My client received a letter stated that Residential Capital, LLC (ResCap) and its subsidiaries, including GMAC Mortgage are restructuring under Bankruptcy Chapter 11. The client had no idea ResCap owned their mortgage. Their original lender was Country Wide, and had changed hands 5 or 6 times before GMAC took over their loan. GMAC then renamed itself Ally Financial.
The client was in the middle of a Home Modification Loan and will most probably have to start all over again filling out paperwork for the modification.
I’m not singling out GMAC specifically, but they are one of the largest mortgage servicers and faced monumental problems in 2010. At that time, they were foreclosing on a New York City homeowner and missing crucial paperwork to seize the property.
GMAC had been creating and signing documents in the names of companies that made the original loan. In this particular case, the original loan was with a notorious subprime company called Ameriquest Mortgage and had gone out of business in 2007.
GMAC began thinking of a way to create a document that would pass legal muster. Bailed out by taxpayers in 2008, they filed a document with New York City authorities that said the delinquent Ameriquest loan had been assigned to them “effective August 2005”. The document was dated July 7, 2010, (three years after Ameriquest ceased to exist) and signed by Jeffrey Stephan, a “Limited Signing Officer” for Ameriquest. Stephan, at that time, was the head of GMAC’s “Document Execution” team. Thus began, and became, the center of, the “robo signing” debacle. Stephan acknowledged in sworn testimony he had been signing 400 such documents each day.
As of last year, GMAC was still pursuing foreclosures signed by Stephan. Generally, banks don’t worry their documents will be challenged. Homeowners rarely contest foreclosure actions. In New Jersey alone, in 4,000 foreclosures, only about 4% of the homeowners had contested the action.
When homeowners do challenge banks’ foreclosure documents, they can have success. The Vermont Supreme Court threw out a foreclosure case handled by GMAC due, in part to an assignment document signed by “Stephan”.
The best thing any homeowner can do is save every receipt, every letter and statement regarding their home loans and payment history. With the selling and reselling, restructuring and bankruptcy filings, it is no wonder “paperwork” slips through the cracks, causing homeowners’ heartbreak.
What will become of GMAC (owned by ResCap) after filing for Chapter 11 bankruptcy?
The filing is intended to speed up ResCap’s sale of its mortgage origination and servicing businesses to Nationstar Mortgage, LLC. Nationstar Mortgage, is owned by Fortress Investment Group LLC. Nationstar Mortgage also operates under the Champion Mortgage brand. Fortress Investment Group is a publicly-owned hedge fund and investment management company based in New York City.
When will the mortgage problems abate? Good question, but I can tell you it will be years before everything is sorted out. If you’re a homeowner who is facing, or will be facing foreclosure, contact a qualified attorney as soon as you can. An attorney can also help sort through this complex system if you’re in foreclosure.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.