In every way, the dirty dealing on the part of the mortgage industry and subsequent foreclosures are examples of just how far Wall Street has fallen.
First, GMAC ten days ago.
GMAC Mortgage said it told some of its outsourced vendors to suspend evictions and REO closings on some foreclosures.
These foreclosures have been held up by challenges to GMAC’s internal procedures for executing judicially required forms, the company added. GMAC has been dealing with the problem for more than three months.
At the center of the controversy are employees of mortgage lenders or servicers who sign affidavits supporting foreclosures that have to be cleared by judges in many states.
With so many foreclosures to process, there’s concern that such affidavits are signed without verifying whether loan documents and other records have the correct information. The integrity of the process is a key component in how judges decide that people’s houses can be taken and given back to the bank.
Dustin Zacks, an attorney at Ice Legal PA — a firm based in Royal Palm Beach, Fla., that specializes in foreclosure defense — is representing some homeowners who are trying to stop their houses from being seized through foreclosure.
Zacks said he deposed a Chase document signer called Beth Ann Cottrell who said she and eight others in her department signed about 18,000 foreclosure-related documents a month, including affidavits of indebtedness.
“Our first question was whether she had personal knowledge of the documents she was signing about,” Zacks said in an interview. “Her answer was no. It’s shocking that they would use this as evidence to seize someone’s property.”
The New York Times sees it as a "sign that the entire foreclosure process is coming under pressure." But we've seen banking systems come under pressure before. We've seen the systems opened up for view and the revelations are usually horrific. But we don't see a follow-up. Heads are banged in a committee hearing in Congress and then the bankers climb back into the jets and head back to Manhattan.
How many foreclosures will turn out to have been illegit? Plenty. How many homeowners will be made whole again?
Yeah, right...
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