In response to a lawsuit filed today by the State of Ohio, GMAC Mortgage LLC said that it has done nothing fraudulent, and no borrowers have been unfairly put through the foreclosure process.
Ohio Attorney General Richard Cordray filed the lawsuit today against GMAC in Lucas County Common Pleas Court. He hopes to obtain a preliminary and permanent injunction preventing GMAC and parent Ally Financial Inc., which was also named as a defendant, from proceeding on any foreclosures or auctions in the state.
Cordray claims that hundreds of false foreclosure affidavits were filed by the servicer in the state. He cited testimony by GMAC employee Jefferey Stephan in a Maine foreclosure case that he signed thousands of affidavits without verifying the content.
Stephan is named as a defendant in the Ohio lawsuit.
But the company insists that no inappropriate foreclosures have occurred.
“There was nothing fraudulent or deceitful about GMAC Mortgage’s practices,” Jim Olecki, a spokesman for the company, said in a written statement. “If procedural mistakes were made in the completion of certain legal documents, GMAC Mortgage reacted proactively to the situation and immediately undertook to remedy the situation.”
Olecki noted that foreclosures are typically not even filed until the loan is six to 12 months delinquent.
“So the fact of default and the right to foreclose are not in dispute,” he said.
Cordray hopes to obtain civil penalties of up to $25,000 for every violation of Ohio’s Consumer Sales Practices Act and for consumer restitution.
“GMAC Mortgage will vigorously defend this lawsuit and expects to be fully vindicated by the Ohio courts,” Olecki concluded.
The state said it has requested that JPMorgan Chase and Bank of America suspend foreclosures and auctions in cases where affidavits were signed by employees who hadn’t personally verified information.
During the first half of this year, 45,930 foreclosures were filed in Ohio, according to Cordray.
State of Ohio, ex rel. Richard Cordray Attorney General of Ohio, 30 East Broad Street, 17th Floor, Columbus, Ohio 43215, Plaintiff vs. GMAC Mortgage LLC c/o Csc-Lawyers Incorporating Service 50 West Broad St., Suite 1800, Columbus, Ohio 43215 and Ally Financial Inc. c/o Ct Corporation System 1300 East Ninth Street Cleveland, Ohio 44114 and Jeffrey Stephan 42 Lenape Drive #L35 Sellersville, PA 18960, Defendants.
Case No. CI0201006984, Oct. 6, 2010 (Lucas County Common Pleas Court).
