Lender Admits Blindly Approving Foreclosures

Evictions suspended over huge 'robosigning' scandal
By Rob Quinn,  Newser Staff
Posted Sep 22, 2010 7:33 AM CDT
Lender Admits Blindly Approving Foreclosures
A foreclosure sign is seen in front of a home in Los Angeles, Calif.    (AP Photo/Paul Sakuma)

(Newser) – Foreclosure eviction proceedings around the country have ground to a halt after a mortgage company employee admitted to signing off on foreclosures without looking at them. The head of foreclosure document processing at Ally Financial, the nation's fourth-largest home lender, was required to verify information and sign documents in the presence of a notary. He has admitted he did neither, the Washington Post reports. He appears to have just signed everything his team put in front of him—around 10,000 documents per month.

Ally's GMAC Mortgage unit has suspended eviction proceedings in 23 states while it investigates, and company execs say hundreds of other companies that used Ally's services—including Fannie Mae and Freddie Mac—may also be affected. Consumer advocates say it is routine for firms to sign off on foreclosures without reviewing the paperwork. "This is business as usual for the mortgage servicing industry," a consumer bankruptcy attorney tells Reuters. "GMAC just got caught." A JPMorgan Chase employee has also admitted that she signed thousands of affidavits without verifying the information, the Financial Times reports. (Read more foreclosures stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.