Cohen Requests Information on Faulty Foreclosure Practices from Nation's Biggest Banks
WASHINGTON, D.C. – Congressman Steve Cohen (TN-9) today joined with House Judiciary Chairman John Conyers (MI-14), Congressman Jerrold Nadler (NY-8), and Congressman Hank Johnson (GA-4) in sending letters to the CEO’s of the Nation’s largest banks asking for documents and information concerning their foreclosure documentation process.
The banks that have received the letters include JP Morgan Chase, Citigroup, Wells Fargo, PNC Financial, Ally Financial/GMAC Mortgage, and Bank of America. In the letters, the Congressmen inform the banks of how they are conducting oversight on the impact of faulty foreclosure documentation practices and request additional information from the banks.
Below is the text of one of the letters:
October 28, 2010
Michael A. Carpenter
Chief Executive Officer
Ally Financial Inc.
200 Renaissance Center
Detroit, MI 48226
Dear Mr. Carpenter:
We are conducting oversight on the impact of faulty foreclosure documentation practices. Faulty documentation raises concern about fundamental notions of justice and fair play in any legal proceeding, including home mortgage foreclosure actions. We have been reviewing the issue of inaccurate foreclosure documentation in bankruptcy cases for some time. More than a year ago, a bankruptcy judge testifying before the House Judiciary Committee expressed her concern that mortgage servicers had been asserting claims without accurate proof and that poor documentation practices led servicers to foreclose on homes without legitimate evidence that they had the legal right to do so.[1]
To assist us with our oversight of this matter, please provide the following information and documents in accordance with the definitions enclosed with this letter, with all personally identifying information redacted. Please note that all of these requests concern documents or information from January 2006 onward, unless otherwise specified.
(1) Provide all documents concerning Ally Financial subsidiary GMAC Mortgage’s (GMAC’s) foreclosure-related documentation policies, procedures, and practices, including, but not limited to, all documents describing in detail both the methodology and the results of all audits or reviews of GMAC’s mortgage foreclosure documentation policies, procedures, and practices.
(2) Provide all documents concerning complaints against GMAC (including, but not limited to, legal complaints) arising from unverified, inaccurate, or false foreclosure-related documentation.
(3) Provide all documents concerning GMAC’s policies, procedures, and practices regarding the assignment of mortgages and notes.
(4) How many foreclosure actions did GMAC file for each calendar year beginning in 2007 and for 2010 through September 2010?
(5) How many mortgages did GMAC modify between for each calendar year beginning in 2007 and for 2010 through September 2010?
(6) What steps has GMAC taken in response to any problems that it has found with its foreclosure documentation policies, procedures, and practices?
(7) In how many instances did GMAC reject a short sale offer by a homeowner facing foreclosure?
(8) Identify any instances where problems have been discovered regarding GMAC’s foreclosure documentation policies, procedures, and practices, including, but not limited to, the following specific items:
(a) Identify any instance where GMAC submitted affidavits that misstated the amount owed on the mortgage.
(b) Identify any instance where GMAC utilized anyone who signed more than 100 affidavits on any given day.
(c) Identify any instance where an affidavit was submitted on behalf of GMAC where the affiant:
(i) failed to review the source documentation supporting the facts averred to in such affidavit;
(ii) failed to fully read such affidavit before signing it;
(iii) failed to review or verify the accuracy of the information verified by him or her in such affidavit; or
(iv) falsely claimed to have under his or her custody and control records relating to the mortgage transactions referred to in such affidavit.
(d) Identify any instance where an affidavit contained false or incomplete information.
(e) Identify any instance where sanctions were issued against GMAC for submitting a false affidavit in connection with a foreclosure action.
(f) Identify any instance where an affidavit prepared on behalf of GMAC contained a forged or otherwise unauthorized signature.
(g) Identify any instance where GMAC submitted an affidavit in connection with a foreclosure action that was not signed in the presence of a notary public when such presence was otherwise required.
(h) Identify any instance where GMAC withdrew an affidavit in support of a foreclosure action and explain why the affidavit was withdrawn.
(i) Identify any instance where GMAC lacked complete evidence of its entitlement to pursue foreclosure, including, but not limited to, a valid written mortgage assignment.
(j) Identify any instance where GMAC pursued a foreclosure action where it did not have physical possession of the mortgage-related documentation or relied solely on an electronic database.
(k) Identify any instance in which GMAC disciplined an employee for failing to follow its foreclosure-related documentation policies, procedures, or practices.
(l) Identify any instance where GMAC mistakenly sought foreclosure based on faulty documentation and provide all documents recording or relating to any communications between GMAC and any borrower regarding such an erroneous foreclosure action.
(m) Identify any instance in which GMAC sought attorney’s fees in excess of the amount authorized by statute.
Please provide your response by no later than 6:00 p.m. on Friday, November 12, 2010. If compliance with these requests cannot be made in full by the stated deadline, compliance shall be made to the fullest extent possible and shall include an explanation of how the compliance is less than full.
You should forward your responses to the House Judiciary Committee, 2138 Rayburn House Office Building, Washington, D.C. 20515. Please contact the Committee at (202) 225-3951 if you have any questions.
Thank you for your prompt attention to this matter.