Foreclosure and Mortgage Fraud....

“JUDGES USED TO LOOK AT US STRANGELY WHEN WE TRIED TO TELL THEM ALL THESE MAJOR FINANCIAL INSTITUTIONS ARE LYING”

This quote, which appeared in an article in last week’s NY Times, is offered by foreclosure defense lawyer Margery Golant of Boca Ryton, FL in response to a recent admission by GMAC that it had filed dubious foreclosure documents. GMAC, the country’s fourth largest home loan lender, says it violated legal rules in a rush to file many foreclosures as quickly as possible.

Defense lawyers and consumer advocates, like Barron & Posternock, have long argued the numerous lenders have used inaccurate or incomplete documents to remove delinquent owners from their houses. GMAC is the first big leader to publicly acknowledge that its practices might have been improper.

The issue has broad consequences for the millions of buyers of foreclosed homes, some of whom might not have clear title to their bargain property. It may offer unforeseen opportunities for those who were evicted.

J. Thomas McGrady, chief judge in the foreclosure hotbed of St. Petersburg, FL said the problems went far beyond GMAC. Four major law firms doing foreclosures for lenders are under investigation by the Florida attorney general. “Some of what the lenders are submitting in court is incompetent, some is just sloppy,” said Judge McGrady. “And somewhere in there could be a fraudulent element.”

In many cases, the defaulting homeowners do not hire lawyers, making problems generated by the lenders hard to detect. “Documents are submitted, and there’s no one to really contest whether it is accurate or not,” the judge said. “We have an affidavit that says it is, so we rely on that. But then later we may find out that someone lost their home when they shouldn’t have...”

-Dan Posternock

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