That same day, The New York Times ran an article about the foreclosure that started the faulty-paperwork foreclosure freeze. The unlucky homeowner is Nicolle Bradbury, who became unable to make her mortgage payments to GMAC after she lost her job (ironically, as an employment counselor). Ms. Bradbury contacted a nonprofit legal assistance group in a last-ditch effort to prevent the foreclosure. Thomas A. Cox, an attorney volunteering for the group, caught the case and was the first, it seems, to notice that GMAC had filed faulty paperwork.
Mr. Cox deposed the GMAC employee who signed off on the foreclosure forms, Jeffrey Stephan. The forms on which he signed off included affidavits to the court attesting to his personal knowledge of the facts stated in the affidavits. As the deposition makes clear, though, Mr. Stephan was little more than a rubber stamp on documents prepared by others -- hundreds of such documents every day. That's unfortunate for him, since court affidavits that I've seen certify that their contents are "true, correct and complete" (or some such language) and represent the signer's personal knowledge "under penalty of perjury." Nor did Mr. Stephan violate GMAC policy:
Q. Is it your understanding that the process that you follow in signing summary judgment affidavits is in accordance with the policies and procedures required of you by GMAC Mortgage?Mr. Stephan's deposition was so damaging to GMAC that the company attempted to keep it out of the public record, citing "the embarrassment GMAC and its employees have suffered, and will continue to suffer, from the posting of excerpts from Stephan's deposition transcript on an Internet blog." (The blog in question appears to be that of Matt Weidner, an attorney.) The judge denied GMAC's motion, stating, "That the testimony reveals corporate practices that GMAC finds embarrassing is not enough to justify issuance of a protective order [to prohibit disseminating discovery materials in this case, including Mr. Stephan's deposition]."
This deposition played a big part in the court reversing its prior summary judgment against Ms. Bradbury. In its order, the court took special notice of GMAC's prior bad behavior:
The Court is particularly troubled by the fact that Stephan's deposition in this case is not the first time that GMAC's high-volume and careless approach to affidavit signing has been exposed. Stephan himself was deposed six months earlier, on December 10, 2009, in Florida. His Florida testimony is consistent with the testimony given in this case: except for some limited checking of figures, he signs summary judgment affidavits without first reading them and without appearing before a notary. Even more troubling, in addition to that Florida action, in May, 2006, another Florida court not only admonished GMAC, it sanctioned Plaintiff lender [the Federal National Mortgage Association, or Fannie Mae] for GMAC's affidavit signing practices. As part of its order, the Florida court required GMAC to file a Notice of Compliance, indicating its commitment to modify its affidavit signing procedures to conform to proper practices. The experience of this case reveals that, despite the Florida Court's order, GMAC's flagrant disregard apparently persists. It is well past the time for such practices to end.The court also found that GMAC filed Mr. Stephan's affidavits in bad faith:
These documents are submitted to a court with the intent that the court find a homeowner liable to the Plaintiff for thousands of dollars and subject to foreclosure on the debtor's residence. Filing such a document without significant regard for its accuracy, which the court in ordinary circumstances may never be able to investigate or otherwise verify, is a serious and troubling matter.Ms. Bradbury's troubles aren't over, as the court's orders merely allow the foreclosure to go to trial. According to the Times article, neither she nor anyone else in her household has been able to make a mortgage payment for two years. It seems likely, then, that unless she finds another job, the trial will result in her losing her home. That's probably the case for most suspended foreclosures, unfortunately.