“SAN FRANCISCO – Consumer attorneys say there are fresh examples of documentation problems in U.S. home foreclosure cases, even as major banks resume legal proceedings against delinquent borrowers.
Bank of America and GMAC Mortgage, two of the largest servicers of U.S. residential loans, have spent a few weeks poring over their foreclosure procedures after allegations surfaced that for years banks have not reviewed documents properly or have submitted false statements to evict delinquent borrowers.
Consumer attorneys doubt the banks have cured the problems, noting that the speed of the announcement that foreclosure proceedings were to resume would have necessitated huge resources devoted to document review.
Bank of America announced on Monday a partial rollback in its foreclosure moratorium. GMAC, a unit of Ally Financial, has also resumed some foreclosure sales.
“How are they going to put out that kind of volume again?” said Christopher Immel, a Florida attorney who represents homeowners.
Bank of America conducted a scientific sampling of 102,000 foreclosures affected by the moratorium imposted earlier this month, said Dan Frahm, a spokesman for Bank of America Home Loans.
Frahm said he wasn’t aware of the sample size, but that it was large enough to have the confidence of the bank and its biggest investors.
“It would be incorrect to say we went through each and every one of them,” Frahm said.
GMAC would not disclose the manpower it used in its review, but spokeswoman Gina Proia said the company devoted “significant resources” to the issue. Across the country, the company is reviewing “each case going to foreclosure sale before it proceeds,” she said.
FLORIDA FORECLOSURE DENIED
But as recently as Friday, GMAC failed to secure a quick foreclosure on a Florida property where GMAC had been forced to withdraw, and then resubmit, a corrected affidavit, said Matthew Weidner, an attorney for the borrower.
To foreclose on a house, a lender must prove it has a valid claim. That means it must certify through an affidavit and other documentation that it clearly holds the right to enforce the terms of the loan, and that the borrower has actually defaulted.
According to Weidner, St. Petersburg-based Judge Walt Fullerton on Friday decided against a quick foreclosure on Carol Hasbrouck’s property, due to the uncertainty of having two sworn affidavits in the case file.
The withdrawn affidavit had been signed by GMAC employee Jeffrey Stephan, court filings show. Stephan helped spark the current controversy by testifying that he had signed some 10,000 documents a month.
The resubmitted affidavit still did not have any supporting documentation attached, which is required by Florida law, Weidner said.”