Archive for September 21st, 2010

GMAC halts foreclosures

In what has quickly become a national story, GMAC has suspended actions in all foreclosure cases in 23 states, including Florida.

There is undoubtedly more to come on this huge, breaking story.  At this point, though, here is what I know (from my own experience as a foreclosure defense attorney with hundreds of cases in Florida). 

Within the past two weeks, I have received notices, in three different cases in which I am counsel, purporting to withdraw an affidavit that had been filed in that case.  There are many similarities among these notices.  Specifically, in all three cases:

1.  The affidavit was used to support a motion for summary judgment (by itemizing the amounts allegedly owed on that note/mortgage). 

Significantly, this is how hundreds of thousands of foreclosure cases have been “pushed through” in Florida – by individuals signing an affidavit stating the total amount owed and the Court accepting that affidavit and granting a Final Judgment of Foreclosure. 

2.  The affiant was Jeffrey Stephan, who purportedly signed, under oath, as a “Limited Signing Officer” for GMAC Mortgage, LLC. 

3.  The Note was securitized, i.e. the Plaintiff is a trust (Deutsche Bank, “as trustee,” or The Bank of New York Mellon, “as trustee”). 

4.  The law firm for the Plaintiff was Florida Default Law Group (one of the three firms currently under investigation by the Florida Attorney General). 

5.  The law firm, Florida Default, tried to withdraw Mr. Stephan’s affidavit “pursuant to Rule 4-3.3, Rules of Professional Conduct of the Rules Regulating The Florida Bar.”  (If you’re not familiar with the language in that rule, click here.  As you can see, this is really serious stuff.  For instance, subsection (b) of the Rule discusses a lawyer’s obligations when a client engages in criminal or fraudulent conduct.)

6.  The law firm, Florida Default, admits “the information in the affidavit may not have been properly verified by the affiant [Mr. Stephan].” 

For a sample Affidavit and Notice, click here – GMAC Affidavit, Withdrawal

Again, I’m sure there will be more to this story in the coming days.  At this point, though, here’s what I’m thinking. 

Florida Default must realize the affidavits signed by Mr. Stephan are either untrue or insufficient to support summary judgment (or both).  Otherwise they would not be taking the unprecedented step of withdrawing the affidavits.  GMAC must realize these same things, or it wouldn’t be taking the unprecedented step of stopping all foreclosure cases. 

What does that mean for the average person?  Well, if you have a case pending and GMAC is the plaintiff or the servicer for the plaintiff, your case will probably be stagnant for a while.  But what about those individuals who have already been foreclosed? 

Rule 1.540, Fla.R.Civ.P., authorizes a party who has lost a case, e.g. via entry of Final Judgment of Foreclosure, to move to vacate the Final Judgment on the grounds of fraud.  Under the circumstances, it’s hardly a stretch to say there may be thousands of people in Florida who have lost their homes as a result of fraud.  

Let me put it this way: 

If you are a defendant in a foreclosure case in which GMAC was or is the Plaintiff, or in which GMAC was or is the servicer, I welcome you to contact my office for a free consultation, especially if Jeffrey Stephen signed an affidavit in your case.

Even if your foreclosure case is already over, there may be grounds to vacate it. 

In fact, you may be able to move back into your home (even if you’ve already been foreclosed). 

If your case is still pending, I strongly urge you to look closely at the affidavits that have been filed in your case.  Have they been signed by Jeffrey Stephan?  Someone else with GMAC?  Bear in mind – just because GMAC is not the Plaintiff does not mean it’s not the servicer, and often it’s the servicer that files affidavits. 

The scariest part about all of this is that, in my view, this is just the tip of the iceberg.  I strongly believe the actions that caused Florida Default to withdraw the affidavits of Jeffrey Stephan, and for GMAC to halt all foreclosure cases, are prevalent in many other cases, with many other affiants and many other banks.  Consider this development yet another reason to defend your foreclosure case with a competent foreclosure defense attorney.  You just never know – maybe we’ll find fraud in your case, too.

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