In the first of what may become a new wave of consumer financial services class actions, several homeowners have sued GMAC Mortgage, LLC, for submitting allegedly false certifications of ownership and affidavits in connection with motions for summary judgment in residential foreclosure actions filed in Maine. In Archibald et al. v. GMAC Mortgage, LLC , plaintiffs allege that GMAC has a policy and practice of submitting certifications and affidavits signed by GMAC employees in support of motions for summary judgment in judicial foreclosure actions without having personal knowledge of the facts or referenced document or verifying that the information contained in the certifications and affidavits was accurate. Plaintiffs further allege that GMAC employees falsely claimed to have custody or control of the records relating to the mortgage transactions and falsely claimed to have signed the affidavits in the presence of a witnessing notary public.
The Plaintiffs assert that as a result of these practices, hundreds if not thousands of Maine homeowners are in imminent danger of losing their homes or have already lost their homes based on false information and representations presented to the court by GMAC in the foreclosure proceedings. In addition, the complaint alleges that homeowners have been required to defend against the improperly asserted claims, and have been wrongfully charged attorney fees and costs in foreclosure actions, which have been added to the amounts claimed to be due from Maine homeowners and deducted from the proceeds from the foreclosure sales of affected homes.
The complaint consists of three counts for (a) Violation of Maine Unfair Practices Act (5 M.R.S.A. §§206, 207), (b) Abuse of Process, and (c) Fraud on the Court. Plaintiffs seek certification of an injunctive class under FRCP 23(b)(2) defined as all Maine homeowners with a GMAC serviced case in which the home secured by the mortgage has not yet been foreclosed upon by completion of sale; and a damages class under FRCP 23(b)(3) on behalf of all Maine homeowners who have had a GMAC serviced foreclosure action initiated in Maine courts in the six years prior to filing the action and whose foreclosure action contains a false certification that was filed in support of the action, or a motion for summary judgment of the foreclosure supported by a false affidavit signed by an employee of GMAC.
As a remedy, Plaintiffs seek to enjoin the filing and further prosecution of GMAC serviced foreclosure actions in Maine, including all sales scheduled to be conducted as a result of judgments of foreclosure in GMAC serviced foreclosure actions, and to halt all evictions resulting from GMAC serviced foreclosure actions. In addition, Plaintiffs want the court to order that GMAC file no further certifications unless they are executed by an employee who has directly verified and has personal knowledge of the facts set forth. Plaintiffs also seek compensation for the legal fees or costs paid by members of the class as a result of the submission of the allegedly false certifications, paid as the result of any summary judgment motion supported by the allegedly false affidavits, and/or incurred in defending GMAC serviced foreclosure actions during the class period, and punitive damages.
The issues raised by this case are playing out across the country in response to deposition testimony of employees whose job it was to review and execute the documents necessary to support actions for judicial foreclosure. At least three major lenders have announced that they are voluntarily halting evictions and some foreclosure proceedings pending evaluation of the impact of these revelations on their foreclosure practices in 23 states where courts have jurisdiction over the foreclosure process. The laws concerning foreclosures vary from state to state, as do the requirements for personal knowledge and notarization of the relevant documents. Whether claims like this are suitable for class treatment remains to be seen, but it is likely defendants will argue that individualized issues make class certification improper.