Ohio Sues GMAC Mortgage for Fraud, Pennsylvania Launches Investigation
GMAC allegedly compounded homeowner misery through 'fraudulent and unfair and deceptive practices'
10/07/2010 | By Truman Lewis
|
ConsumerAffairs.com
| Finance In Pennsylvania, Attorney General Tom Corbett urged homeowners in his state to file complaints concerning questionable mortgage foreclosures to aid in his investgations.
Slamming the barn door after the horses had all fled, Bank of America yesterday announced it would stop writing home loans through independent brokers, an action taken more than a year ago by JPMorgan Chase.
"We know that as Ohioans were fighting to save their homes, this loan servicer benefited financially from the dire circumstances," said Cordray. "Instead of stepping up and assisting those at risk of losing their homes, it is clear that GMAC chose to compound the problem through fraudulent and unfair and deceptive practices."
According to the lawsuit, GMAC and its employees committed fraud on Ohio consumers and Ohio courts by signing and filing hundreds of false affidavits in foreclosure cases. The fraud came to light after a GMAC employee, Jefferey Stephan of Sellersville, Pa., testified in a foreclosure case out of Maine that from 2006 to 2010, he signed thousands of affidavits without verifying the content.
Through the lawsuit, Cordray is asking the court to grant a preliminary and permanent injunction preventing GMAC/Ally from proceeding to foreclose in any pending Ohio case or allowing the property to be sold. Cordray is also asking for civil penalties of up to $25,000 for every violation of Ohio's Consumer Sales Practices Act and for consumer restitution.
As a result of similar reports regarding depositions taken by a JPMorgan Chase and Bank of America employees, Cordray also requested that JPMorgan Chase and Bank of America suspend moving toward a judgment, sale, eviction or property transfer involving any foreclosure case with affidavits signed by those employees. Cordray also sent letters to Wells Fargo and Citibank, requesting that the banks meet with his office to discuss foreclosure affidavit procedures.
According to recent statistics from the Ohio Supreme Court, the wave of foreclosures in Ohio has shown no signs of receding. In the first half of this year, there have been 45,930 foreclosures in Ohio, which is ahead of last year's record-breaking pace. From 1995-2009, Ohio foreclosure filings quadrupled.
Meanwhile, Pennsylvania's Corbett went public with a plea for complaints from homeowners in the Keystone State.
"Pennsylvania residents who believe they are the victims of improper foreclosures should call the Attorney General's toll-free Consumer Protection Hotline, at 1-800-441-2555, as soon as possible in order to file formal complaints," Corbett said. "We are working to identify whether our Consumer Protection Laws were violated by lenders or mortgage servicing companies that may have failed to follow proper procedures regarding foreclosures."
In addition to filing a complaint with the Attorney General's Bureau of Consumer Protection, Corbett also recommended that homeowners who have received foreclosure notices should contact the Pennsylvania Housing Finance Agency (PHFA) for information about emergency mortgage assistance, foreclosure mitigation counseling and other services that may be available.
Pennsylvania consumers can call PHFA directly at 1-800-822-1174, or review detailed information about mortgage and foreclosure assistance services on the PHFA website, at: www.phfa.org/consumers/homeowners/hemap.aspx.
