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GMAC Drew `False Testimony' Sanction Years Before Eviction Halt

Publication Date: 
September 23, 2010
Source: 
Bloomberg.com
Author: 
Dakin Campbell and Lorraine Woellert

Professor Deborah Rhode is quoted in Bloomberg on allegations against GMAC Mortgage that it evicted homeowners without verifying that borrowers actually defaulted on their loans or whether the firm had legal standing to seize the homes. Dakin Campbell and Lorraine Woellert filed this story:

Ally Financial Inc.’s GMAC Mortgage unit, which suspended evictions in 23 states last week after finding employees didn’t verify foreclosure documents, was sanctioned in 2006 for similar practices, court records show.

GMAC gave “false testimony” when it justified foreclosures by submitting sworn affidavits signed by a mortgage executive who later said in a deposition she didn’t actually review the loan documents or sign in the presence of a notary, according to a 2006 court order filed in Duval County, Florida. In response to the sanctions, GMAC Mortgage directed employees to “read and fully understand” court documents before signing.

...

Deborah Rhode, a Stanford University law professor and director of the school’s Center on the Legal Profession, said GMAC Mortgage’s behavior may amount to misleading the court.

“It’s not ‘technical’ when people attest under oath to knowledge they don’t have, and it doesn’t matter that in fact there isn’t actual error or discrepancy,” Rhode said. “Any court would take this very seriously.”

Judges could decide to dismiss the foreclosures, sanction the attorneys and company or levy a “substantial” financial penalty that would “get their attention,” she said.