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Crisis In The Housing Market

Evicted By A Robo-Signer

How did a middle manager at GMAC Mortgage sign off on 10,000 foreclosures a month? He didn't read the paperwork like he was supposed to.

The company (part of Ally Financial, a Planet Money sponsor) recently halted evictions in dozens of states, after news of the robo-signer came to light, NPR reports.

The case — which could allow thousands of homeowners to challenge their evictions — has triggered other reports this week of sloppy foreclosure practices.

An official at JPMorganChase said in a deposition earlier this year that she signed off on thousands of foreclosures without verifying the details, the FT reported yesterday.

A man in Fort Lauderdale, Florida paid cash for his home last year — then was foreclosed on by Bank of America this summer, despite the fact that he owned the house outright and didn't have a mortgage, according to the South Florida Sun Sentinel. (B of A says it is correcting the error.)

And an employee of a Georgia document processing company falsely claimed to work for dozens of different lenders while signing off on tens of thousands of foreclosure documents over the course of several years, the Washington Post reports.

Ally says that its review of the GMAC Finance issue has "revealed no evidence of any factual misstatements or inaccuracies" in the documents that weren't properly reviewed. And the company says it has fixed its process for reviewing foreclosure documents.