Investigation finds GMAC falsified paperwork to pursue foreclosure

July 27, 2011 06:44PM

Nationwide mortgage servicer GMAC, which was the beneficiary of a taxpayer bailout in 2008, submitted false documentation to foreclose on homeowners for whom it lacked original lending paperwork, according to information obtained by ProPublica.

In one case, GMAC wanted to foreclose on a New York City homeowner, but couldn’t sign documents in the name of the original lender as is customary because the company, Ameriquest, had gone out of business. So GMAC allegedly filed a document dated July 2010, three years after Ameriquest folded, that said it had been assigned the loan in 2005. It was signed by a GMAC executive claiming to be a “Limited Signing Officer” for Ameriquest, the paperwork says.

“This assignment of mortgage has all of the markings of GMAC finding that it lacked a needed mortgage assignment in order to foreclose, and [was] just making it up,” said Thomas Cox, a Maine foreclosure defense attorney. Another attorney called it outright fraud. But GMAC continues to pursue foreclosure in the New York case.

This is different from the practice known as robo-signing where lenders claim a more intimate knowledge of the underlying mortgage than they actually have. The ProPublica investigation shows GMAC was producing false documents and likely submitted hundreds of them to government agencies across the country. [ProPublica]