Professional Documents
Culture Documents
CIVIL DIVISION
Plaintiff
MICHAEL A FOX et al
Defendants
his motion for sanctions and to hold Plaintiff Deutsch Bank Trust Company c
o GMAC
and incorporated herein by reference Defendant requests an oral hearing on this matter
Respectfully submitted
J HN S 078598
950 Venture Drive Ste B1
Dublin Ohio 43017
0440
339
614
0515 fax
416
614
john net
sherrodlaw
a
1
Memorandum In Support
I Factual Background
Johnstown Ohio 43031 Attached to Plaintiffs complaint was a false and misleading
March 25 2009 Plaintiff filed a motion for summary judgment which relied on false and
In many mortgage foreclosure cases filed in Ohio GMAC claimed and claims to be the
holder of the promissory note and mortgage that form the basis for the foreclosure action and in
these cases GMAC is obviously the plaintiff In many other Ohio cases GMAC is not the
named plaintiff but is the servicer or sub servicer for a trustee holding in a pool hundreds or
even thousands of mortgages for investors in certificates evidencing ownership interests in the
securitized mortgage loans the trust As a servicer for the trust GMAC is responsible for
collecting payments on the mortgage loans from borrowers and applying them as required by the
applicable documents communicating with the borrowers about insurance and tax payments the
borrowers allegedly owe negotiating with borrowers over late fees other fees and loan
affidavits and assignments of mortgage to pursue and selling properties of the borrowers that
2
GMAC acted and is still acting as a sub servicer for trusts in securitized transactions in
many Ohio foreclosure cases including this one In a securitized transaction with a master
servicer and sub servicer the sub servicer has primary responsibility for communications with
the borrowers and actions taken against the borrower In order to facilitate the mortgage
securitization process when the borrower executes a mortgage typically that mortgage is either
industry whose shareholders consist of banks and other financial institutions including GMAC
The mortgage banking industry created MERS to streamline the mortgage process and
save money by using electronic commerce to eliminate paper and the need to file assignments of
mortgage every time a mortgage was transferred in the securitization process or subsequent
changes in servicing Unless MERS is the plaintiff in a foreclosure case MERS does not hold
the note of a borrower and is not named in the note or any transfer of the note but simply is
named the secured party in the mortgage filed in the local real estate records as the nominee of
servicer sub servicer or its agent is responsible for the preparation of the papers filed in the
Ohio foreclosure action In the many securitized transactions in which GMAC was or is the
servicer or sub servicer of Ohio mortgage loans GMAC has been responsible for the preparation
of the necessary documents including an assignment of mortgage assigning the mortgage from
MERS to the trustee In some cases MERS gives servicers and sub servicers the authority to
execute assignments of mortgage from MERS to the trustee MERS however never authorizes
3
servicers or sub servicers to execute an assignment of mortgage that includes an assignment of a
note
Despite this lack of authority GMAC has caused assignments of mortgage to be prepared
and executed by agents of GMAC that improperly purport to assign the note from MERS to the
trustee and falsely claim that the GMAC employee in this case Jeffrey Stephan has authority to
improper and false assignments that have been filed in Ohio foreclosure cases and that have the
purpose of trying to deceive the borrower and courts as to who is the note holder
B GMAC Signed and Filed False Affidavits in 2006
In May of 2006 the Circuit Court of the Fourth Judicial Circuit in and for Duvall County
Florida sanctioned the plaintiff in a mortgage foreclosure case the Florida Foreclosure
Decision because an employee of GMAC had signed a false affidavit on behalf of the plaintiff
The court said Plaintiff through its servicing entity GMAC Mortgage Corporation submitted
false testimony to the Court in the form of Affidavits of Indebtedness signed and subscribed by
Limited Signing Officer with GMAC Mortgage Corporation who would attest to review
a
all of the relevant loan documents when in fact she neither reviewed the referenced records
nor was familiar with the manner in which the records were created by GMAC on behalf of
The court sanctioned plaintiff in the Florida Foreclosure decision and ordered GMAC to
provide written confirmation that affidavits filed in future foreclosure actions in Florida
4
Jeffrey Stephan has been a team leader in the foreclosure department of GMAC for years
including through at least August 2 2010 Stephan has been an employee of GMAC or
affiliates for approximately five years In a December 10 2009 deposition the 2009
Deposition in a Florida state court foreclosure case the 2009 Florida Case Stephan testified
to sign In spite of the Florida Foreclosure Decision Stephan testified that he did not sign the
affidavits based on his personal knowledge and that he relied on others He also testified that his
team did not verify the accuracy of information They do not go into the system and verify the
information as accurate We are relying on our attorney network to ensure that they are asking
for the correct information Stephan knew or should have known that these thousands of
affidavits would be filed in Ohio courts and relied upon by Ohio common pleas judges in
deciding whether the plaintiff in the particular case had a right to foreclose on Ohio residents
When Stephan executed an affidavit or assignment he testified he did not ascertain who
the current promissory note holder was even though his affidavits always stated or implied that
plaintiff was the holder of the note The agents of GMAC prepared these affidavits to mislead
the courts in Ohio on such matters as who kept the applicable records who the holder of the note
was the amount due to whoever the holder of the note was and whether proper notice alleging
default had been sent to the borrower
foreclosure cases in Ohio Stephan claiming to be an officer of MERS signed for many Ohio
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foreclosure cases assignments of mortgage falsely claiming that he signed a borrower
s mortgage
and note from MERS to the plaintiff even though he did not have the authority of MERS to
assign a note to any party Stephan also admitted that he signed thousands of affidavits outside
Stephan was acting within the scope of his employment with GMAC when he executed
these false affidavits and assignments and when he executed the affidavits and assignments
outside the presence of notaries public GMAC had authority over and the right to control the
actions of Stephan and benefitted financially from the actions of Stephan s actions
Stephan
were part of the business plan of GMAC to deceive the courts and defendants in foreclosure
actions
GMAC has outsourced various pieces of the foreclosure process For example GMAC
contracts with Fiserv Inc Fisery to provide such computer services as recording payments
received from and amounts allegedly due lenders Fisery advertises that it is a leading global
solutions for optimizing all aspects of the payments mix to help create efficiency and growth
GMAC employees executed thousands of false affidavits and assignments and purported to enter
and other information into computers for the Fisery system It is
payments failures to pay
Fisery that creates and maintains the records and calculates the amounts allegedly due from
borrowers
case the Maine Mortgage Foreclosure Case Stephan testified that he did not have any
knowledge about how GMAC ensures the accuracy of the data entered into the system
6
Lender Processing Services Inc LPS provides a separate system that creates
documents for GMAC in the foreclosure process and acts as an intermediary between attorneys
for GMAC in the foreclosure process As part of GMAC policy Stephan did not read every
affidavits he signed that were prepared by LPS The
paragraph of the summary judgment
should have known that failure to supervise the accuracy of the input of information into
and document preparation would lead to errors and inaccuracies that would violate GMAC
s
duty to consumers to accurately account for payments received by consumers and payments
owed by consumers
GMAC learned of the 2009 Deposition soon after that deposition but it took no
corrective action whatsoever During the 2010 Deposition Stephan testified a he signed
affidavits outside the presence of a notary b when he signed a summary judgment affidavit he
did not inspect any exhibits attached to it c he did not read every paragraph of the summary
judgment affidavits he signed and d the process he followed in signing summary judgment
affidavits is in accordance with the policies and procedures required of you by GMAC GMAC
The defendant in the Maine Mortgage Foreclosure moved for sanctions for a false
affidavit that and which the court relied upon The Maine court held oral
Stephan signed
argument on the motion on September 1 2010 On September 24 the Maine court vacated the
grant of summary judgment and also addressed a motion for a protective order that had been
filed that would have prohibited the dissemination of the deposition of Stephan taken in the case
7
The Maine court said that Plaintiff points to 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 Maine court denied the motion for protective order noting
s deposition was taken to advance a legitimate purpose
Stephan
The Maine court then granted the motion for sanctions filed by the borrower stating
Since the oral argument in the Maine Mortgage Foreclosure Case was held on September
1 2010 GMAC knew sanctions were imminent In spite of his admissions in his depositions
Jeffrey Stephan is still employed by GMAC reflecting the fact that his actions were in
s complaint and motion for summary judgment were accompanied by false and
Plaintiff
Affidavits made in bad faith Should it appear to the satisfaction of the court at
any time that any of the affidavits presented pursuant to this rule are presented
in bad faith
the court shall forthwith order the party employing them to pay
to the other party the amount of the reasonable expenses which the filing of the
affidavit caused him to incur including reasonable attorney
s fees and any
offending party may be adjudged guilty of contempt
in bad faith GMAC employee Jeffrey Stephan has consistently acknowledged that he partook in
8
the above described conduct on thousands of occasions As the Maine court noted this is not an
isolated event GMAC has engaged in chicanery and subterfuge in a deliberate effort to
Accordingly based upon the foregoing Defendant requests that this Court enter an order
Respectfully submitted
7e
e
SHE 416
614
0440
39
Venture
0515 fax
j ohngsherrodlaw
net
OD 0078598
Drive St B1
n Ohio 43017
Certificate of Service
Undersigned certifies that a true and accurate copy of the foregoing was delivered to the
following via regular US Mail this 18 day of October 2010
9
Attorney for Defendant Licking County Treasurer
Sh od
10
After Recording Please Return To
Manley Deal Kochal
ci LLC
O Box 165028
P EvAnuIBIT
Columbus Ohio 43216
File Number 0 j 14 o
ASSIGNMENT
MERS Mortgage
Assigner Electronic
whose address ORegistration
is P Box 2026 Systems
Flint MI Inc
48501acti2026
ng solhereby
ely as executes
nomineethifors mortgage
Aegis Wholassiesal e Corporation
gnment for th e
purposeCompany
Trust ofacknowledging
Americas andTrustee
placing thirdBALI
as
parties2006QA1I
on notice of the transfer conveyance and assi gnment Deutsch
for to
Corporation 1 100 Assignee addre
whose address is do GMAC Mortgage
Virginia Drive P
O Box 8300 Fort
Washington Pennsylvania
September 21 2006 executed anddelivered by Michael A Fox and Barbara sic J Fox husband and wife which dated
its interest in that mortgage
mortgageOhio
County was filed October 2 2006 recorded at Official Instrument Number 200610020028681 Recorder
s Office Licking
The property encumbered by such mortgage is described as follows See Exhibit A for legal description
Parcel No 036 11056200
009
Property Address 10999 Jug Street Johnstown OH 43031
The Recorder is hereby requested to cross reference this Assignment to the recording reference ofthe mortgage hereinbefore
described
MERS Mortgage
solely in
as no
Electronic Registration
iesafie6
Systems
tion
Inc acting
By
Signature
Notdi Pu 1 c
roon
No 3 M10
2010
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