Last summer, GMAC was looking to foreclose on a property here in Brooklyn. Only problem was, it didn’t have documentation proving that it actually owned the mortgage and the original lender, Ameriquest, couldn’t help because it had gone the way of the dodo a few years earlier. So what’s a mortgage servicer to do but fabricate the paperwork?

The folks at ProPublica have uncovered a number of documents related to this particular situation, which they believe is just the tip of the iceberg.

In April 2010, the head of GMAC’s “Document Execution” team pointed out “[W]e do not have signing authority–are there any other options?” to a fellow GMAC employee and the lawyers pursuing the foreclosure action.

Jump ahead three months and, voila!, here’s a document from Ameriquest stating that the property had been assigned to GMAC effective August 2005. Two little hitches with that bit of paperwork: 1) It was signed and dated July 2010, years after Ameriquest had ceased to exist; 2) The GMAC employee who had pointed out the problem a few months before was now identified as a “Limited Signing Officer” for Ameriquest.

(It also repeatedly misspells the name of Horsham, PA, my hometown’s arch-nemesis, as “Horsesham.”)

Regardless, GMAC went ahead and used the document to file for foreclosure.

Even after admitting to ProPublica that the employee had no authority to sign on behalf of Ameriquest, GMAC tells the site that it plans to move ahead with the foreclosure. The company rep said that loan had already been flagged as problematic and that GMAC is “determining what needs to be done in order to receive the necessary authorization.”

ProPublica says that a review of court documents in New York, where it’s a felony to file a public record with intent to deceive, turned up hundreds of similar documents filed — by GMAC and others — in the name of Ameriquest since 2008.

For example:

Another GMAC document obtained by ProPublica shows that in at least one recent incident, GMAC employees were still discussing the possibility of fabricating evidence needed to facilitate a foreclosure.

The company once again lacked a document that would show it had been assigned the mortgage. Since the lender was defunct and no assignment had ever been made, GMAC again seemed to be stuck. But the employee proposed in June of this year that GMAC file a sworn statement that the assignment had once existed but had been lost. It’s unclear if such an affidavit was ultimately provided to a court.

Last fall, GMAC was the first mortgage servicer to halt evictions and foreclosures in 23 states after it was revealed that the company — and many other servicers — were using untrained “robo-signers” to process foreclosure paperwork, which was not always complete or factual. Bank of America and JPMorgan Chase also put the brakes on foreclosures soon after.

Internal Doc Reveals GMAC Filed False Document in Bid to Foreclose [ProPublica]

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