Financial Services Law Developments: FYI: Senator Franken Requests Feds Prosecute Ally, Require Compensation to Borrowers

Friday, October 1, 2010

FYI: Senator Franken Requests Feds Prosecute Ally, Require Compensation to Borrowers

Senator Al Franken of Minnesota sent a letter to the United States Treasury, DOJ, HUD, FRB, OCC and FDIC requesting investigation and prosecution of Ally and and its employees for "any criminal conduct," that the agencies require "proper restitution and compensation" for "illegitimate foreclosure actions," and that the agencies confirm that no FHA or HAMP related loans "were associated with Ally's misconduct."

A copy of Franken's letter is available at:

http://franken.senate.gov/files/letter/100930_All_Financial_Letter.pdf

Specifically, the letter states:

Each of your agencies has an important role to play in addressing this egregious situation and holding all appropriate actors fully accountable. As such, I respectfully request that you collaborate to conduct a thorough investigation into the alleged misconduct. As part of this investigation, it is crucial that Ally and its employees are held fully accountable for any criminal misconduct. Additionally, all homeowners who may have experienced illegitimate foreclosure sales, those who have been forced to defend against illegitimate foreclosure actions, and those who have been harmed must be identified. These individuals must receive proper restitution and compensation, as provided for under the law. It is also critical to confirm that no loans provided through the Federal Housing Administration or in conjunction with the Home Affordable Modification Program were associated with Ally's misconduct.

Unfortunately, concerns have been raised that Ally's practices are not an anomaly in this industry, and that these bad practices are used by numerous other companies as well. Therefore, I request that you report on the actions your agencies are taking (and plan to take) to improve oversight of mortgage servicers overall. In particular, please inform me of steps that you will take to ensure that similar misconduct is not currently occurring within other mortgage service companies and how future improper activity can best be prevented. This should include any measures that may be taken within the Home Affordable Modification Program and by the Federal Housing Administration.

Let me know if you have any questions. Thanks.

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320

Fax: (866) 581-9302
Mobile: (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

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From: Ralph Wutscher [mailto:rwutscher@kahrlwutscherllp.com]
Sent: Thursday, September 30, 2010 5:50 PM
To: rwutscher@kw-llp.com
Cc: socaloffice@kw-llp.com; dcoffice@kw-llp.com; Chicago Office
Subject: FYI: GMAC/Ally Affidavit Issue - Purported Deposition Transcripts

As many of you have requested, please see the following links for the purported deposition transcripts regarding the GMAC/Ally affidavit news media blitz issue:

http://www.scribd.com/doc/28762965/Full-Deposition-of-Jeffrey-Stephan-GMAC-s-Assignment-Affidavit-Slave-10-000-Documents-a-Month

http://www.scribd.com/doc/33129394/2nd-Deposition-of-Jeffrey-Stephan-%E2%80%93-GMAC-s-Assignment-Affidavit-Slave

Let me know if you have any questions. Thanks.

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320

Fax: (866) 581-9302
Mobile: (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

From: Ralph Wutscher [mailto:rwutscher@kahrlwutscherllp.com]
Sent: Thursday, September 30, 2010 3:58 PM
To: rwutscher@kw-llp.com
Cc: socaloffice@kw-llp.com; dcoffice@kw-llp.com; Chicago Office
Subject: FYI: Ohio Sec of State Refers Chase to DOJ for Allegedly Improper F/C Affidavits

In the latest assault on MERS, and in connection with the Ally affidavit news media blitz, Ohio Secretary of State Jennifer Brunner, Ohio's chief elections officer and the Ohio state officer responsible for licensing notary publics, today issued a directive to Ohio boards of elections that foreclosures cannot be used without further investigation to disqualify voters, notably allowing the defaulted mortgagors until Election Day to update their addresses.

The full press release is available at:
http://www.sos.state.oh.us/SOS/PressReleases/2010/20100930.aspx

Ohio Secretary Brunner also referred matters of alleged notary abuse in thousands of home mortgage foreclosures by Chase Home Finance LLC and Mortgage Electronic Registration Systems, Inc. to U.S. District Attorney Steven Dettelbach in Cleveland.

Brunner cited depositions of a Chase employee and a MERS corporate officer. The cited deposition transcripts are available at:

http://www.sos.state.oh.us/SOS/Upload/news/18may10cottrellb.pdf
http://www.sos.state.oh.us/SOS/Upload/news/20100930-Full-Deposition.pdf

According to the Ohio Secretary, these depositions supposed reveal that 18,000 documents per month are executed and notarized per month by eight people at Chase, supposedly with testimony that: (1) the notary and not the document fills in numbers in the affidavits used in court ordered foreclosures; (2) no oath is administered for the signing of each document; (3) notarized documents are not verified by the person signing and giving oath that they have personal knowledge of the contents of the documents, but rather, signers are relying on verification by others; (4) documents are signed in bulk and notarized in bulk separately; (5) the acknowledging notaries know this at the time they notarize documents in this process.

In addition, according to the Ohio Secretary, the MERS deposition supposedly demonstrates that after corporate status changes occurred for MERS, new designations of authority were not executed, leaving one or more individuals for the former MERS corporation continuing to delegate authority on behalf of the new corporation without authorization by the new corporation.

Let me know if you have any questions. Thanks.

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois 60602
Direct: (312) 551-9320

Fax: (866) 581-9302
Mobile: (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

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The Editor's Bio

Ralph T. Wutscher
Maurice Wutscher LLP
20 N. Clark Street, 33rd Floor
Chicago, Illinois 60602
Direct: (312) 493-0874
RWutscher@MauriceWutscher.com
https://www.MauriceWutscher.com/

Ralph Wutscher's practice focuses primarily on representing depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, distressed asset buyers and sellers, loss mitigation companies, automobile and other personal property secured lenders and finance companies, credit card and other unsecured lenders, and other consumer financial services providers. He represents the consumer lending industry as a litigator, and as regulatory compliance counsel.

Ralph has substantial experience in defending private consumer finance lawsuits, including cases ranging from large interstate putative class actions to localized single-asset cases, as well as in responding to regulatory investigations and other governmental proceedings. His litigation successes include not only victories at the trial court level, but also on appeal, and in various jurisdictions. He has successfully defended numerous putative class actions asserting violations of a wide range of federal and state consumer protection statutes. He is frequently consulted to assist other law firms in developing or improving litigation strategies in cases filed around the country.

Ralph also has substantial experience in counseling clients regarding their compliance with federal laws, and with state and local laws primarily of the Midwestern United States. For example, he regularly provides assistance in connection with portfolio or program audits, consumer lending disclosure issues, the design and implementation of marketing and advertising campaigns, licensing and reporting issues, compliance with usury laws and other limitations on pricing, compliance with state and local “predatory lending” laws, drafting or obtaining opinion letters on a single- or multi-state basis, interstate branching and loan production office licensing, evaluations and modifications of new or existing products and procedures, debt collection and servicing practices, proper methods of responding to consumer inquiries and furnishing consumer information, as well as proposed or existing arrangements with settlement service providers and other vendors, and the implementation of procedural or other operational changes following developments in the law.

Ralph is a member of the Governing Committee of the Conference on Consumer Finance Law. He is also the immediate past Chair of the Preemption and Federalism Subcommittee for the ABA's Consumer Financial Services Committee. He served on the Law Committee for the former National Home Equity Mortgage Association, and completed two terms as Co-Chair of the Consumer Credit Committee of the Chicago Bar Association.

Ralph received his Juris Doctor from the University of Illinois College of Law, and his undergraduate degree from the University of California at Los Angeles (UCLA). He is a member of the national Mortgage Bankers Association, the American Bankers Association, the Conference on Consumer Finance Law, DBA International, the ACA International Members Attorney Program, as well as the American and Chicago Bar Associations.

Ralph is admitted to practice in Illinois, as well as in the United States Court of Appeals for the Seventh Circuit, the United States District Courts for the Northern and Southern Districts of Illinois, and the United States District Court for the Eastern District of Wisconsin, and has been admitted pro hac vice in various jurisdictions around the country.