Next week I will travel to federal bankruptcy court where Robert Brown, supported by my friend Paula Rush are petitioning the court to appoint a borrower’s committee in the GMAC/Residential Capital Bankruptcy. Just last Friday, at the very last minute, GMAC objected to the appointment of the Committee…Objection attached below.
I want you to read the objection carefully, but the thing that just has me hitting the roof right now is how much their objection relies upon the 49 State Attorney General Settlement as part of the argument against sitting a committee to speak for the rights of consumers. I’ve railed long and hard against the 49 State Sellout. It was and is a slap in the face to consumers, a gift to the banks, no real penalty for astonishing wrongdoing…..and now GMAC asserts that, because they’ve made their penance, they need not be responsive to consumers in the context of the bankruptcy.
THIS IS OF COURSE OUTRAGEOUS! The 49 State AG was a settlement of paltry proportions to the insurance fraud that was committed by the banks. The terms were not even a good stern talking to, much less a slap on the wrist. Really, read the Settlement Terms….note that what GMAC is agreeing to, in adopting the terms, is to FOLLOW EXISTING LAWS! From the Term Sheet:
Servicer shall ensure that factual assertions made in pleadings
(complaint, counterclaim, cross-claim, answer or similar
pleadings), bankruptcy proofs of claim (including any facts
provided by Servicer or based on information provided by the
Servicer that are included in any attachment and submitted to
establish the truth of such facts) (” POC”), Declarations, affidavits,
and sworn statements filed by or on behalf of Servicer in judicial
foreclosures or bankruptcy proceedings and notices of default,
notices of sale and similar notices submitted by or on behalf of
Servicer in non-judicial foreclosures are accurate and complete and
are supported by competent and reliable evidence. Before a loan is
referred to non-judicial foreclosure, Servicer shall ensure that it has
reviewed competent and reliable evidence to substantiate the
borrower’s default and the right to foreclose, including the
borrower’s loan status and loan information.
2. Servicer shall ensure that affidavits, sworn statements, and
Declarations are based on personal knowledge, which may be
based on the affiant’s review of Servicer’s books and records, in
accordance with the evidentiary requirements of applicable state or
federal law.
3. Servicer shall ensure that affidavits, sworn statements and
Declarations executed by Servicer’s affiants are based on the
affiant’s review and personal knowledge of the accuracy and
completeness of the assertions in the affidavit, sworn statement or
Declaration, set out facts that Servicer reasonably believes would
be admissible in evidence, and show that the affiant is competent
to testify on the matters stated.
Servicer shall have standards for qualifications, training and
supervision of employees. Servicer shall train and supervise
employees who regularly prepare or execute affidavits, sworn
statements or Declarations. Each such employee shall sign a
certification that he or she has received the training. Servicer shall
oversee the training completion to ensure each required employee
properly and timely completes such training. Servicer shall
maintain written records confirming that each such employee has
completed the training and the subjects covered by the training.
5. Servicer shall review and approve standardized forms of affidavits,
standardized forms of sworn statements, and standardized forms of
Declarations prepared by or signed by an employee or officer of
Servicer, or executed by a third party using a power of attorney on
behalf of Servicer, to ensure compliance with applicable law, rules,
court procedure, and the terms of this Agreement (” the
Agreement”).
6. Affidavits, sworn statements and Declarations shall accurately
identify the name of the affiant, the entity of which the affiant is an
employee, and the affiant’s title.
7. Affidavits, sworn statements and Declarations, including their
notarization, shall fully comply with all applicable state law
requirements.
8. Affidavits, sworn statements and Declarations shall not contain
information that is false or unsubstantiated. This requirement shall
not preclude Declarations based on information and belief where
so stated.
9. Servicer shall assess and ensure that it has an adequate number of
employees and that employees have reasonable time to prepare,
verify, and execute pleadings, POCs, motions for relief from stay
(” MRS”), affidavits, sworn statements and Declarations.
And specific to Bankruptcy Court Proceedings again, GMAC is now asserting that they are going to start adhering to basic requirements of practice in federal court….basic things like filing correct information. Just think about it for a moment…what if you or I were a large volume practitioner or Defendant in hundreds of cases and we just decided we wouldn’t adopt proper procedures that would allow us to respond properly to the litigation. After getting caught again and again and again, we finally promised to do things correctly then paraded around patting ourselves on the back because we finally agreed to do it correctly.
OUTRAGEOUS!
But here is the detail on what they agreed to start doing correctly. Just to emphasize how bad the conduct was, just flip the sentence around and read it as an admission of what was being done incorrectly. Now there’s a key point here…Remember the term, “Robo Signing“? Well, the Wall Street Journal reports that the term first was used in reference to a certain notorious robo signer. His Name? Jeffrey Stephan. Stephan worked for? GMAC. Just for reference, his deposition is here.
And so after all that, GMAC should get a pass? I think not.
But before we even get to that, THE MOST IMPORTANT THING WE ALL NEED TO FOCUS ON IS WHAT FEDERAL GOVERNMENT, OFFICE OF INSPECTOR GENERAL SAID ABOUT THE ALLY CASE:
Ally is a nonsupervised FHA direct endorsement lender that can originate, sponsor, and serviceFHA-insured loans. During Federal fiscal years 2009 and 2010, Ally submitted 6,808 FHAclaims totaling $897.3 million
Ally issued a press release on September 24, 2010, stating that a procedural error was found to have occurred in certain of its affidavits required in certain States. It further stated in the press release that it was temporarily suspending evictions and post foreclosure closings in the 23 judicial States while it conducted a review. On October 12, 2010, Ally issued another press release, stating that it had found no evidence to date of any inappropriate foreclosures. As of September 30, 2010, Ally was servicing more than 199,000 FHA-insured mortgages, and more than 5,000 of these were going through its foreclosure process.
Our review was significantly hindered by Ally’s refusal to allow us to interview responsiblepersonnel and its failure to provide the documentation we requested in a timely manner. At ourrequest, Ally gave us a list of employees responsible for signing affidavits.
AND ONE OF THE THINGS THAT JUST DRIVES ME BONKERS ABOUT THE 49 STATE AG SELLOUT:
We Attempted to interview these employees to determine whether they properly processed foreclosure affidavits but were told by Ally’s attorneys that we could not do so. Therefore, we worked with DOJ and served 19 CIDs to Ally and 18 current employees in December 2010 in an attempt to compel testimony. Individual counsel for each of the employees objected, citing Fifth Amendment concerns, and we were prohibited from interviewing them.Ally also failed to produce requested documents and other information in a timely manner.Therefore, we served Ally with two Inspector General subpoenas on December 6, 2010. The information and data it provided in response to our two subpoenas were incomplete and provided only intermittently over several months despite repeated requests. Ultimately, Ally provided
Did you get that? Do you understand what happened here? They stonewalled the Federal Office of Inspector General….but wait, there’s more…
IT WORKED! IT REALLY, REALLY WORKED!
THEY GOT AWAY WITH IT!
HA HA!
Ain’t that grand…..and now they just want to keep on keepin on….getting away with it all!~
https://www.scribd.com/doc/85340875/2012-PH-1801ally
Bankruptcy Documents.
1. Proofs of Claim (” POC”). Servicer shall ensure that POCs filed
on behalf of Servicer are documented in accordance with the
United States Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure, and any applicable local rule or order (” bankruptcy
law”). Unless not permitted by statute or rule, Servicer shall
ensure that each POC is documented by attaching:
a. The original or a duplicate of the note, including all
indorsements; a copy of any mortgage or deed of trust
securing the notes (including, if applicable, evidence of
recordation in the applicable land records); and copies of
any assignments of mortgage or deed of trust required to
demonstrate the right to foreclose on the borrower’s note
under applicable state law (collectively, ” Loan
Documents”). If the note has been lost or destroyed, a lost
note affidavit shall be submitted.
b. If, in addition to its principal amount, a claim includes
interest, fees, expenses, or other charges incurred before the
petition was filed, an itemized statement of the interest,
fees, expenses, or charges shall be filed with the proof of
claim (including any expenses or charges based on an
escrow analysis as of the date of filing) at least in the detail
specified in the current draft of Official Form B 10
(effective December 2011) (” Official Form B 10″)
Attachment A.
c. A statement of the amount necessary to cure any default as
of the date of the petition shall be filed with the proof of
claim.
d. If a security interest is claimed in property that is the
debtor’s principal residence, the attachment prescribed by
the appropriate Official Form shall be filed with the proof
of claim.
e. Servicer shall include a statement in a POC setting forth the
basis for asserting that the applicable party has the right to
foreclose.
f. The POC shall be signed (either by hand or by appropriate
electronic signature) by the responsible person under
penalty of perjury after reasonable investigation, stating
that the information set forth in the POC is true and correct
to the best of such responsible person’s knowledge,
information, and reasonable belief, and clearly identify the
responsible person’s employer and position or title with the
employer.
2. Motions for Relief from Stay (” MRS”). Unless not permitted by
bankruptcy law, Servicer shall ensure that each MRS in a chapter
13 proceeding is documented by attaching:
a. To the extent not previously submitted with a POC, a copy
of the Loan Documents; if such documents were previously
submitted with a POC, a statement to that effect. If the
promissory note has been lost or destroyed, a lost note
affidavit shall be submitted;
b. To the extent not previously submitted with a POC,
Servicer shall include a statement in an MRS setting forth
the basis for asserting that the applicable party has the right
to foreclose.
c. An affidavit, sworn statement or Declaration made by
Servicer or based on information provided by Servicer
(” MRS affidavit” (which term includes, without limitation,
any facts provided by Servicer that are included in any
attachment and submitted to establish the truth of such
facts) setting forth:
i. whether there has been a default in paying prepetition
arrearage or post-petition amounts (an
” MRS delinquency”);
ii. if there has been such a default, (a) the unpaid
principal balance, (b) a description of any default
with respect to the pre-petition arrearage, (c) a
description of any default with respect to the postpetition
amount (including, if applicable, any
escrow shortage), (d) the amount of the pre-petition
arrearage (if applicable), (e) the post-petition
payment amount , (f) for the period since the date of
the first post-petition or pre-petition default that is
continuing and has not been cured, the date and
amount of each payment made (including escrow
payments) and the application of each such
payment, and (g) the amount, date and description
of each fee or charge applied to such pre-petition
amount or post-petition amount since the later of the
date of the petition or the preceding statement
pursuant to paragraph III.B.1.a; and
iii. all amounts claimed, including a statement of the
amount necessary to cure any default on or about
the date of the MRS.
Consent_Judgment_Ally-4-11-12
GMAC Debtors’ Objection to Motion 9.14.12-2
gmaccreditorobjection
