Posted on Thursday, October 21, 2010
BY: CARRIE BAY
GMAC Mortgage was the first company to halt foreclosures in 23 states where a judge’s approval is required because of concerns that the legal paperwork was not validated and processed correctly. After two months of reviewing individual case files, the company says it will restart foreclosure proceedings.
“Our review and remediation activities related to cases involving judicial affidavits in the 23 states continues,” said James Olecki, a spokesperson for GMAC Mortgage’s parent company Ally Financial. “As each of those files is reviewed, and remediated when needed, the foreclosure process resumes.”
GMAC’s suspension of foreclosure actions and REO sales was prompted by the unearthing of a court deposition in which one of its servicing executives testified that he was signing off on thousands of foreclosures a month, without checking the paperwork for accuracy or signing the documents in the presence of a notary.
News of documentation deficiencies at GMAC and a number of other major servicers has raised questions about the legitimacy of foreclosure rulings and homeowner evictions, but Olecki says his company has found “no evidence of inappropriate foreclosures to date” and plans to move forward with taking possession of properties where borrowers have failed to make payments on the mortgage.
Bank of America announced Monday that it is also lifting its foreclosure suspension in 23 states.
The company says it has found no instances in which a homeowner was wrongly foreclosed upon and has begun the process of preparing 102,000 foreclosure affidavits that have been on hold for re-submission to the courts beginning next Monday. BofA plans to continue postponing foreclosure sales in the remaining 27 states until the company’s paperwork reviews are completed on a state-by-state basis.
Bank of America and GMAC may be intent on moving forward with foreclosure proceedings, but at least one county sheriff in the judicial state of Illinois says he’s not going to carry out their evictions.
Sheriff Thomas Dart of Cook County, which includes the city of Chicago, said Tuesday that he will not put defaulted borrowers out of their homes based on eviction orders from BofA, GMAC, or JPMorgan Chase until the companies “can provide complete assurance that the foreclosure was done properly and legally.”
The three lenders have until Monday, October 25th to respond to Dart’s demand for affidavits affirming any foreclosures they file in Cook County have been properly processed in accordance with Illinois law. The sheriff says BofA, GMAC, and JPMorgan, along with their subsidiaries, make up a third of the approximately 3,700 foreclosure eviction orders filed with his office annually.
Dart says he will extend the county-wide moratorium on evictions to any other lending institutions which publicly admit to or which investigators find engaged in questionable foreclosure processing practices.
According to a statement from the Cook County sheriff’s office, even after filing, it typically takes about 10 months before a foreclosure eviction order is actually carried out there. Dart says one in every 30 homes in Cook County is at some stage of foreclosure.