Clinic joins foreclosure motions

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The students in Peter Holland’s consumer protection law clinic preparing for trial finished Tuesday’s class practicing a cross-examination based on discrepancies in signed bank documents. Holland, on the witness stand as the person who signed the documents, answered questions about the perceived inconsistencies. He maintained all of the signatures were his and he knew what he was signing.

The exchange had the familiar ring of a foreclosure case involving a “robo-signer,” except the students at the University of Maryland School of Law actually were mooting for one of their two dozen consumer debt collection cases. The similarities between the two issues, however, is one reason the clinic has joined motions to create foreclosure defendant classes and then dismiss those cases because of alleged robo-signing by employees of two mortgage services.

“This is students getting involved to help solve a real crisis,” said Holland, a visiting professor. “This is the intersection of legal ethics, civil procedure, rules of the court, candor to the court and doing the right thing.”

The motions were filed last week in pending foreclosures in Baltimore City and Montgomery County circuit courts. In both cases, the homeowners are represented by Civil Justice Inc. They charge that Jeffrey Stephan of GMAC Mortgage and Xee Moua of Wells Fargo did not have any personal knowledge of facts in affidavits they signed. Both gave depositions last year in Florida foreclosure cases, stating that they signed hundreds of documents a day, only making sure the spellings of their names was correct.

The number of Marylanders who could be included in the class of foreclosure defendants could number in the hundreds, Holland said.

The filings in the two Maryland cases are each about an inch thick and consist largely of transcripts of out-of-state depositions taken of the two alleged robo-signers several months ago.

Stephan was deposed in the out-of-state cases where GMAC was involved in a foreclosure in the past year and made a startling series of admissions in those sworn interviews about how he does his job. Stephan’s testimony played a major role in GMAC’s decision to halt foreclosures in 23 states in September.

In a December 2009 interview in a Florida case, when the borrower’s attorney asked Stephan how many affidavits he would sign in a month, suggesting 100 or 500 as possible answers, Stephan offered “a round number of 10,000.” He testified that he and his team relied on an outside group of attorneys to get everything right and that his signature did not mean he had any personal knowledge of the file. Stephan, who works as a foreclosure team leader out of Pennsylvania and has been with GMAC for 6 years, also admitted that notaries are “not physically present,” as required, when he executes the documents.

“It’s an assault on the integrity of the courts, taking away people’s property without following the rules,” said Holland, who has a consumer rights practice in Annapolis.

Civil Justice attorneys Phillip Robinson and Anthony DePastina pointed out these flaws in their motion filed last week in Baltimore City Circuit Court to dismiss the pending foreclosure of a small brick house occupied by Kevin J. Matthews. In a separate motion, Civil Justice and Holland’s clinic asked the city circuit court to certify a class of defendants consisting of all targets of Stephan’s affidavits. They also asked to be appointed special masters.

Coincidentally, the attorney acting as substitute trustee for GMAC is Jacob Geesing, who has had his own trouble recently with affidavits. Although he does not appear to have filed a corrective affidavit in the Matthews case, his practice of allowing others to sign his affidavits, only to file hundreds of follow-up corrections, has called those testimonial documents into question.

In the Montgomery County case, where a Silver Spring woman is the defendant, the alleged robo-signer is Moua of Wells Fargo, who has also been the subject of news reports. In her March deposition, she also said she relies on outside attorneys to verify the accuracy of the information in the foreclosure file and can sign her name to such affidavits 300 to 500 times a day.

Holland said the concept of “robo-signing” is nothing new in consumer debt and foreclosure cases.

“It’s new to the courts but not to consumer advocates,” he said. “It’s only now that during litigation people are starting to admit under oath that they spent 13 seconds reviewing the documents.”

Robinson and Holland are among a small group of consumer attorneys in Maryland who have previously been successful in class actions against the debt collection industry and foreclosure rescue scammers.