September 28, 2010

Via U.S. Mail

The Honorable Judge

County Court of Common Pleas

Re: Foreclosure Affidavits

Dear Judge XXXXX,

I write you, and the other presiding and administrative judges of the Ohio Courts of
Common Pleas, to draw your attention to an issue that may be of interest to you.

As you are aware, when a plaintiff in a foreclosure case moves for default or summary
judgment, it will attach an affidavit from the lender or mortgage servicer attesting to the
ownership and default status of loan. During the last week, questions have arisen about the
validity of the foreclosure affidavits filed by a large servicer, GMAC Mortgage. GMAC (also
operating as “Ally Financial”) issued a press release on September 20, 2010 announcing that it
had directed certain of its vendors to suspend evictions and REO closings because of “a potential
issue that was raised in a number of existing foreclosures challenging the internal procedure we
used for executing one or more judicially required forms.”

A number of media outlets, including The Washington Post and The New York Times,
reported on this statement. The news articles suggest that GMAC’s actions are related to a
Florida deposition and a Maine deposition given by one of its employees, Jeffrey Stephan. Mr.
Stephan signed thousands of foreclosure affidavits for GMAC, but in his depositions stated that
he does not have knowledge of how the information in the affidavit is determined (Deposition of
Jeffrey Stephan, June 7, 2010, p 30), does not know how the accuracy of the information is
verified (Id.), does not review the exhibits attached to the affidavit (Id., p 54), does not read
every paragraph of the affidavit (Id. p 61), and does not have the affidavit notarized in his
presence (Id., p 56).

The depositions were not taken by my office, so I do not opine on their accuracy, but I
wanted to draw your attention to this issue. At least one court has found that filing affidavits that
falsely claim personal knowledge is a violation of the Ohio Consumer Sales Practices Act when
filed in connection with consumer transactions. Midland Funding, LLC v. Brent, 644 F. Supp. 2d
961, 977 (N.D. Ohio, 2009).

More broadly, I urge you as administrators to share this letter with your colleagues and
urge them to exercise caution when approving any foreclosure orders involving GMAC. Further,
I encourage you to consider whether additional administrative procedures need to be established

Ohio Attorney General’s Office

30 East Broad St 17th Fl ● Columbus, Ohio 43215 ● PHONE 614.466-4320 ● FAX 614.466-5087 ● www.OhioAttorneyGeneral.gov
to protect homeowners who are facing the threat of foreclosure. Issues similar to those
surrounding GMAC have arisen in Ohio. For example, my office filed an amicus brief in an
appellate case where a foreclosure affidavit averred that it was executed in Florida but the jurat
and notarization stated that it was executed in New Jersey. The 2nd District Court of Appeals
ruled that the trial court did not abuse its discretion by striking the faulty affidavit. HSBC Bank
USA v. Thompson, 2010-Ohio-4158.

Please feel free to contact me or my Consumer Protection Section Chief, Susan Choe, at
614.466.1305, if we can be of any assistance regarding this letter.

Thank you.

Sincerely,

Richard Cordray
Ohio Attorney General

CC:
Sarah Lynn, Deputy Chief Counsel, Ohio Attorney General
Susan Choe, Consumer Protection Section Chief, Ohio Attorney General