Fraudulent Affidavits in Foreclosure

Do you suspect your lender may have used a fraudulent affidavit in your foreclosure case?

You are probably not far off the mark. In mid-September GMAC announced that it was suspending foreclosures in 23 states due to potentially defective affidavits submitted to the courts. This was followed by more disclosures by other banks that they too had questionable affidavits and would be suspending entry of foreclosure judgments and sales until they had time to review the accuracy of the information submitted. All 50 state attorney generals have expressed concern or started investigations into the practices and procedures by lenders and their attorneys.

Through many depositions taken over the past year by attorneys around the nation, we have learned that lenders have hired hair dressers and other inexperienced and untrained employees to perform tasks including signature on tens of thousands of assignments and affidavits without knowing what they were signing and the impact of these documents. These affidavits and assignments have been used to support the foreclosure complaints and judgments. No notaries were present when many of the documents were signed which is usually a fatally defective error. Most documents were signed in 30 seconds to one minute and without personal knowledge or verification of any of the facts. Notary stamps were passed around like candy and used by anyone in the office. Employees with no authority to act on behalf of the lender sat around practicing signatures of other employees to be able to sign a higher volume of documents. All of this has happened and is now coming out in depositions taken by private attorneys or by the Florida Attorney General in their pending investigation of foreclosure mills in Florida.

So what does this mean? Well for one thing, it may result in damages to the homeowner. Title companies are now refusing to issue title on GMAC loans and other questionable cases. In Florida, lenders can seek deficiency judgments for the unpaid balance following the sale of your home. They can then garnish wages. The pool of investors willing to buy foreclosed homes will shrink, and the amounts paid will also decrease resulting in higher deficiency balances. In more egregious cases, it actually led to foreclosure on the wrong house, or for the wrong amounts.

Please contact an attorney if you are in foreclosure and affidavits or assignments have been submitted. These documents should be reviewed by someone competent to recognize the robo-signers. If your home has already been foreclosed on and a sale or judgment has been entered, please contact an attorney who may now have grounds to set aside the sale or judgment based upon fraudulent affidavits. It's not too late to act. Legal counsel can still evaluate the affidavits for grounds to use to assert affirmative defenses that will prevent deficiency judgments or reverse judgments and sales.

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