Internal Doc Reveals GMAC Filed False Document in Bid to Foreclose

GMAC, one of the nation's largest mortgage servicers, faced a quandary last summer. It wanted to foreclose on a New York City homeowner but lacked the crucial paperwork needed to seize the property.

GMAC has a standard solution to such problems, which arise frequently in the post-bubble economy. Its employees secure permission to create and sign documents in the name of companies that made the original loans. But this case was trickier because the lender, a notorious subprime company named Ameriquest, had gone out of business in 2007.

And so GMAC, which was bailed out by taxpayers [1] in 2008, began looking for a way to craft a document that would pass legal muster, internal records obtained by ProPublica [2]show.

"The problem is we do not have signing authority—are there any other options?" Jeffrey Stephan, the head of GMAC's "Document Execution" team, wrote to another employee and the law firm pursuing the foreclosure action [2]. No solutions were offered.

Three months later, GMAC had an answer. It filed a document with New York City authorities [3] that said the delinquent Ameriquest loan had been assigned to it "effective of" August 2005. The document [3] was dated July 7, 2010, three years after Ameriquest had ceased to exist and was signed by Stephan, who was identified as a "Limited Signing Officer" for Ameriquest Mortgage Company. Soon after, GMAC filed for foreclosure.

An examination by ProPublica suggests this transaction was not unique. A review of court records in New York identified hundreds of similar assignment documents filed in the name of Ameriquest after 2008 by GMAC and other mortgage servicers.

Read on.

Keep in mind that the "Limited Signing Officer" that signed the bogus Assignment of Mortgage was Jeffrey Stephan. Here is Stephan's deposition in one of the foreclosure cases and his background.

From Fraud Digest website:

Jeffrey Stephan says his current title is team leader of the document execution

team for GMAC. He estimates that he signs between 8,000 and 12,000
documents monthly. He supervises a team of 14 employees.

Mortgage Assignments and Affidavits in support of Summary Judgment signed by
Stephan have been used by GMAC, FANNIE & FREDDIE in over 100,000
foreclosure cases.