Ally Bank Withdraws Maryland Robosigner Foreclosures

If you’re one of 250 Maryland homeowners with a foreclosure order signed by Ally Bank’s Jeffrey Stephan, you’ve just been granted a reprieve. The bank is withdrawing all Maryland foreclosures authorized by Stephan, who admitted that he casually signed off on thousands of foreclosures each month. But homeowners aren’t completely off the hook. Ally plans to restart the foreclosure process with new filings.

Ally, formerly GMAC, doesn’t plan on extending the action beyond Maryland, though consumer advocates believe the company may eventually have no choice.

What they’re doing is triage,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “They’re thinking: We’ve got a problem in Maryland. Let’s get in front of it. But they’re naive if they think that what they’re doing in Maryland is going to shut the door on their troubles elsewhere.”

The move comes after a Baltimore judge dismissed a foreclosure action in which a homeowner accused Ally of committing fraud by authorizing foreclosure orders signed by Stephans, who admitted that he had signed as many as 10,000 foreclosures per month without checking to see if they were accurate.

Ally Financial to withdraw Maryland foreclosures signed by Jeffrey Stephan [Washington Post]

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  1. Duke_Newcombe-Making children and adults as fat as pigs says:

    In before “pay yer mortgages you dirty hippies, and you won’t be forclosed on!!111″.

    • YokoOhNo says:

      All the deadbeat mortgagees, living the good life, getting drunk all day, getting their nails done, driving around in brand new cars, watching flat screen tv’s, doing drugs…and now they get a free house!

  2. Rose says:

    Ally plans to restart the foreclosure process with new filings.

    And will charge the mortgage-holders accordingly for the additional filings.

    • Cosmo_Kramer says:

      lolwut? Nice theory, but they can’t do that. They can take their foreclosure expenses out of the money they get from selling your house at auction (that is, the excess over the mortgage balance if any), but more foreclosed houses aren’t worth the mortgage balance these days so that’s a non-issue.

      • scoobydoo says:

        Willing to bet they’ll still try and cram them in there somehow. This is a bank we are talking about, they don’t do fair and legal.

      • Rose says:

        Lolwhut? You think they’re going to obey the law? Really?

        Whatever. It may be illegal for them to do that, but they’ll stick the charges in there somewhere.

  3. bitslammer says:

    How about criminal and/or civil charges for Jeffrey Stephan? Did he commit fraud or were his actions just plain imcompetant? I can see him being in teh clear if everything was correct as he stated, but what about a case where he attested to someting that is directly contradicted in the documents he said he reviewed?

    • Loias supports harsher punishments against corporations says:

      I’ll accept a commuited sentence in exchange for testimony against CEOs and resulting jailtime.

  4. stevied says:

    who/what is Jeffrey Stephan (or any other “robosigner” ?

    What is their task? What is their position in the company?

    Is Jeffrey an officer of the corporation, lawyer etc responsible for certifying the content of the claim or just an employee compiling the documents? An employee compiling the documents would have little reason to review the documents other than confirming all of the docs were present. Officer of the corp on the other hand should have a higher function.

    • Brunette Bookworm says:

      Read this for an explanation…

      http://schott.blogs.nytimes.com/2010/10/06/robo-signers/

      or this…

      http://www.msnbc.msn.com/id/39641329/ns/business-real_estate/

      Robosigners are signing a legal document saying they reviewed the documents pesonally when many didn’t or didn’t even SEE the documents in question. It doesn’t matter who they are in the company. They sign a statement saying they did work they didn’t really do. They were employed by the companies specifically to do just that, lie. These mortgage companies shouldn’t be able to proceed with forclosures until someone really looks at the documents before signing off that they did so.

      • stevied says:

        Got a neutral discussion?

        Again, are these people compiling documents or certifying the claim? There is a big farking difference.

        A nurse compiling your hospital records so you can be transferred to another hospital might review the records to see that your xray reports were in the file…. doesn’t mean she is responsible for reviewing the xray report, verifying the accuracy of the report or determining if your surgeon responded to the report. At the end of the compiling the nurse will “sign off” that the records are complete.

        That nurse is a robosigner. She has verified the documents being complete.

        The same as the entry level employee signing the mortgage docs. It is meaningless.

  5. xspook says:
    • theblackdog says:

      I call BS on that actually being him.

      • Kate says:

        It’s obviously a woman in one of those hats that has fur/hair sticking straight up out of the top. Didn’t sound legit at all and not in any dress you would expect of someone at a deposition.

  6. slim150 says:

    i love ally’s business model.

    when everyone hates you, just change your name and make funny commercials!

  7. Misterben says:

    If you have been threatened with foreclosure, you should immediately hire an attorney and instruct them to review all documentation pertaining to your mortgage. There is a very good chance that the bank did something wrong at some point that will make it very difficult or even impossible for them to foreclose.

    I’ve worked in the real estate and title insurance industry for 15 years, usually behind the scenes in underwriting positions. I can tell you from first-hand experience that the vast majority of mortgages filed in the last 20 years were slapped together by poorly-trained, low-paid functionaries who did not actually understand their jobs, following arbitrary and contradictory rules composed by tyrannical but inconsistent bosses.

    Most people take it for granted that their bank has the right to foreclose, but this is not so. Foreclosure can only take place if your bank follows a long list of very specific rules when they create, execute, and maintain your mortgage. Most banks have done a terrible job with this over the last two decades. Any mistakes made by the bank can either delay the foreclosure or block it altogether. All you have to do is find the mistakes and force the judge to act on them.

    • Kate says:

      I have been astounded lately by the completely unprofessional, completely slovenly outright non working systems that banks apparently have set up now to deal with issues with loans. I can only assume that the lack of regulation over the last decade let them pretty much do what ever they want and at that point the consumer has no recourse for the situation this puts them in.

  8. oldwiz65 says:

    It never ceases to amaze me how little banks care for the proper procedures. The people working there know full well they can’t or won’t be prosecuted for illegal actions so they don’t really care.

  9. oldwiz65 says:

    They have so many foreclosures to do that they simply cut corners cause they know that most of the time they will get away with it. The worst that can happen is that they will have to refile. they know they are not liable for mistakes.

  10. Loias supports harsher punishments against corporations says:

    If banks has actually done all the required diligence to forclose on homes, then the forclosures of all the delinquent homes would have taken years.

    Which would mean we would have never seen a giant jump on forclosed homes; forclosures would have remained at a steady pace for years, and home values wouldn’t have plummeted.

    This means that we wouldn’t have had a housing market that tanked, and our situation would have been much better. Further, given the long time it takes for forclosing (in this scenario) banks would have been encouraged to do more loan modification programs. We would have all won in the end.

    Now we all lost. Thank you, banks.

  11. Blueskylaw says:

    “Stephans admitted that he had signed as many as 10,000 foreclosures per month without checking to see if they were accurate”

    Is there a “clawback” feature in his contract? Will he still be getting a golden parachute? It looks like the people who were ordered to do the work will get the shaft while the people giving the orders will still benefit from the actions of the Hoi Polloi.