GMAC Mortgage: "Proudly Executing Up To 10,000 Fake Documents Per Month"

Tyler Durden's picture

Since we live in a day and age when nobody in their right mind has the attention span to read an actual deposition transcript, here is a powerpoint presentation prepared by Max Gardner's Bankruptcy Boot Camp excerpting the deposition of GMAC Mortgage employee Jeffrey Stephen in which he essentially confirms that the firm executes up to 10,000 fake documents per month. The punchline:

Q. So other than the due date and the balances due, is it correct that you do not know whether any other part of the affidavit that you sign is true?

A. That could be correct.

We could be wrong, but this is about to become a national level scandal.

Full must read summary (ppt link, feel free to send to all your friends and neighbors who may have had a GMAC mortgage):


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kengland's picture

While it is obvious this is fraud at the highest level, nothing will come from it. We will be talking about a koran being burned or a mosque built in short order.

You ever see the movie "The International." Everyones hands are in this. Who are you going to go after

traderjoe's picture

Oh, I dunno. This could offer more consumers the opportunity to NOT pay their mortgage, or even get a free house in that rare occasion. And lawyers will smell the blood in the water - deep pocketed defendants, and someone even less popular than them to sue (and a decent paper trail and precedent). 

I agree that this won't likely blow up. But it is one more chink in the armor. And eventually we reach the tipping point where perhaps people realize that maybe the system really isn't in their benefit...

bob_dabolina's picture

Seeing as the GSE's are now owned by the taxpayers, and the taxpayers are the ones with the mortgages, aren't the tax payers owners of their mortgages?

The way I see it, everyone is entitled to a free home. I'm not saying I agree with it, but I'm calling a horse a horse.

JLee2027's picture

Seeing as the GSE's are now owned by the taxpayers, and the taxpayers are the ones with the mortgages, aren't the tax payers owners of their mortgages?

I agree, except only the elites own it, not the people.

The way I see it, everyone is entitled to a free home. I'm not saying I agree with it, but I'm calling a horse a horse.

You're in the Barney Frank camp, except in his vision, someone else pays for that "free home".

PiratePiggy's picture

Cmon, JLee. You should know Barney doesn't like a sour puss.


"Cmon, Snake Eyes!  ....Snake eyes for the free house."


Don't let the Honorary Congressman huff and puff and blow your house down, JLee.

Getagrip's picture

Exactly, no scandals allowed going into elections. S/P 1550 and more CNBC cheerleading! All is well... 

themosmitsos's picture

Tyler, you're harshing my mellow ;)

HarryWanger's picture

Agreed. ZH points out and picks up some great shit nobody else does but as usual, nothing ever comes of it. People really don't care - just the ones reading this forum.

ColonelCooper's picture

Sad isn't it?  I'm so happy I could just shit.

Tortfeasor's picture

There are a group of attorneys (almost all local people, small biz owners and solo practitioners) that see this every day, and we CARE and we do everything we can do to make sure that judges CARE.

sushi's picture


People really don't care



I think the people do care. The problem is that elected officials and government adminstrative types do not seek to uphold the law. If they did there would be people going to jail and an economic system in the toilet.

How are you going to get elected if you put your corporate benefactor behind bars? Screw the people!! We gotta save the system of democratic corporatism.

anonnn's picture

A Black Swan is likely to have that transient first.

Azannoth's picture

"The International." - Great movie, justice cant be had in the official system because ever1 is a part of the scam

Spalding_Smailes's picture

Mozilo reached out to borrowers as part of a "little experiment" to understand the reasoning behind making only minimum payments on so-called pay-option loans, a practice that boosts the total amount due, the 67-year-old CEO told investors Wednesday in New York.

"What we're finding out is that they're pretty smart," Mozilo said. "It's like voters: Individually they're sort of idiots, but collectively they seem to make the right decisions."

"CEO Makes Call on Pay-Option Loans: It's Risky", from Bloomberg News.

Rainman's picture

....a " little experiment " . Hilarious. Reminds me of Don Ameche and Ralph Bellamy in Trading Places. They bet a buck on converting a homeless bum into a Philly aristocrat. Mozillo wasn't betting a buck. He must've watched the movie one time too many.

Joao Gulan's picture

That quote's from way back in September 14, 2006 when banks actually thought that they were going to get their money back.  |B^) 

Village Idiot's picture


Is that a recent quote by Mozilo?


Edit: never mind.

bob_dabolina's picture

Obama can't provide a birth certificate, you think anything will come of this?


mynhair's picture

He can so provide a BC, he just doesn't care.


Cheyenne's picture

That's one monster Q&A. However, that one word--"could"--turns this to shit. Sorry. See ZH in a few hours...

Jasper M's picture

If that guy's a lawyer, he should be DISbarred, tout suite.'s picture

ya know TD, your little zerØhedge website is an insanity i have never know before. well, at least, i acknowledge this. that is a good step, right B O B.

Bob's picture

Right.  Maybe you can work out the next eleven steps for us, kc.  But I gotta say, praying to a Higher Power doesn't seem to be cutting it for America.  

Then again, the good Lord is said to help those who help themselves. 

Pitchforks, anyone?

rosiescenario's picture

"Then again, the good Lord is said to help those who help themselves."

...well that helps explain themselves to evrything tht is not nailed down and then claim to be doing God's work.

Joao Gulan's picture

Great transcript of the deposition!

Back in the January 15, 2007 issue of Bloomberg's Business Week an article on the bankruptcy bootcamp said:

"...Bankruptcy Boot Camp, the brainchild of O. Max Gardner III, the go-to guy for consumer bankruptcy attorneys across the country." 

Bankruptcy always reminds me of when in Oct. 2005, the TBTF credit card banks convinced congress and Bush to make personal bankruptcies much more difficult to perform, so the card holders that they had trapped into 30% rates couldn't escape the loan sharking rates that way?

Bob's picture

Strange isn't it--it would seem they were prescient about blowing up the global economy! 

Now where's the law holding them responsible in any way, form or manner whatsoever?

Hon. Narragansett's picture

Max has hundreds of graduates from his bootcamp. He maintains a listserve so that they can all network & assist. These folks know what they are doing. Around my parts they have been engaging in securitization issues and haven't had too much headway so far because, well, judges just don't want to upset the applecart too much. Let me tell you however if there is anything that makes a judge pissed it's being lied to under oath. Madder still is having false affidavits filed in hundreds of cases that they didn't give a second look at because everyone knows that a bank doesn't foreclose unless it has good reason. When Max's bootcamp attorneys start bringing these cases across the country there will be a real shitstorm that starts brewing.

pitz's picture

The prices of houses, and all the mortgage paper that backs them, are all going to zero anyways. Along with rents.

This is but a mere speedbump on the road to hyperinflation.

Weimar Germany, bitches, housing cost less than 1% of income.

Very few, if any of the people who avoid foreclosure through this loophole, will have the foresight to invest in productive enterprises or precious metals. So its not like they're going to gain economically.

MacHoolahan's picture

Is that right though? Do homeowners (non-paper asset holders) lose in a hyperinflationary scenario? Or do they find the house they paid $200k for is suddenly worth $2m due to the devaluation of the governments nonsense-notes?


I only ask because in the UK - housing ain't really down (since 07), oil ain't really down (since 07), metals aren't really down (since 07). All that's down is Sterling vs the other made-up-rubbish. Not arguing with you - I'm a bit of a hard-ass on this - debtors should pay - or default and lose their assets. But I can't see the mechanism for what you describe when the US/UK just prints and prints and prints and prints until all the debtors owe peanuts.


Put me right someone - I'm earning well at the moment (luckily and probably temporarily), and would like to know what to do with my fiat stipend.



pitz's picture

Houseowners lose everything in a hyperinflation because the entirety of their income is consumed in consumables.

The deflation over the past 3 decades has been the key driver of housing prices. Inflation, especially hyperinflation, unwinds those gains.

MacHoolahan's picture

No need to delete.... It's what I'm trying to get to. Hyperinflation isn't people pushing money around in wheelbarrows (necessarily). It's earnings vs assets. Here in the UK we are on a merry old game where nobody gets a pay-rise for the last few years - but everything gets more expensive. People (I meet) are just now slapping themsleves awake that this is the case.

It will pan out the same in the US because people who depend on certain prices for work, trade, feeding children etc will not be able to afford it.

As I tried to explain to my Dad the other night - when he looked at me sorrily with a "why aren't you just like us" face - we've had> the hyperinflation. That was the 90-10s. Anybody who has saved money has lost massively. If you are, like me, in your late 30s - your parents will not get it.

The wheelbarrow is a post hyperinflation event - called currency collapse. It may or may not happen. I have a horrible fear it will in some regard. But get it straight - hyperinflation has happene. This is the aftermath. 

MacHoolahan's picture

Sorry for the inappropriate bolding - the editor is pants.

Joao Gulan's picture

Hey, Mac,

No, disrespect, but everyone' parents are like yours, necessarily.  My son is 36 and I'm 67, but I'm educating him not the reverse.  |B^)

IQ 145's picture is what you do with your stipend; they offer Silver too now, you'll notice. This, of course, will result in much larger profits than gold. Cheers.

Bazza McKenzie's picture

No.  It is not correct.  House prices inflate with other fixed assets during hyperinflation.  It is true that during hyperinflation there can be a lot of volatility in the relative rate of price change in various assets, depending on rapidly shifting demand and supply blockages within the economy.  So at some point they may be a bit behind or a bit ahead of the appreciation in other assets and in tradable goods, but that is not a big deal.

Householders may do badly for other reasons, eg if they are on a fixed income or are employed in job categories where they have little power (eg many of the professions, taxi drivers, etc), or they lose their job, but that is not related to home ownership.

Anyone who has a mortgage potentially benefits enormously.  Ultimately the mortgage effectively goes to zero while the value of the property appreciates.  However, since hyperinflation does not happen instantaneously but is the culmination of a gradually increasing rate of inflation and economic dislocation, the risk for a mortgage holder is of losing employment and income at a stage before the value of the mortgage has been dramatically sliced, being unable to pay the mortgage at that stage and losing the property.

Those who hold investment property may get caught out, since rent control is one of the things governments automatically try to impose in a futile attempt to slow the pace of inflation and to stop having people thrown into the street. That's probably less a risk with commercial real estate.

During the hyperinflation of the Weimar republic (and also that of Austria and Hungary which was occuring at about the same time, for essentially the same reasons), people were able to retain value in gold, silver, jewelry, and particularly foreign currency (at that time the dollar, the pound, swiss francs, but effectively any currency that was not subject to hyperinflation itself) and shop keepers began to greatly prefer foreign currency.

Any securities whose value is fixed in currency terms, such as government or commercial bonds became worthless, so don't put your money there (unless it is very short term).

Farmers tended to hold back their produce until they really needed to sell it, since it retained its value while the currency depreciated. But there is a limit on the lifespan of a lot of produce. There was a tendency to buy up and hoard stocks of commodities, such as coal, but you then need somewhere to store it.  Also any hoarding of consumables runs the risk that at some point it will be taken from you by force, by the government or rampaging mobs. It is obviously easier to hide precious metals, jewelry and foreign currency than to hide great stacks of coal, wheat and cattle.

The Rogue Economist's picture

This may help. When most people think of hyperinflation, they think of exacerbated inflation, but true hyperinflation is an entirely different beast altogether. Hyperinflation isn't runaway inflation (although it can start that way), it's a mass panic out of a currency. When this happens, the sellers of goods and assets will only trade their real goods for an extrodinary amount of currency, and quickly adjust for any revaluations that the government makes to the zero on the banknotes. Ironically, this means that there's always a shortage of currency even as a government floods it into their economy in an attempt to stabalize the situation. Wages don't keep up with inflation under these circumstances, so the lady in the picture had probably traded some real asset (likefine if her dresses) for that wheelborrow of cash. Under these circumstances, housing loses real value due to all of the people who'se electric and water costs are skyrocketing. They have to sell, and housing loses value compared to other goods. Here gold and silver are king. They actually appreciate greatly in buying power as the panic sets in. You might want to consider picking some up as "insurance". The time to buy would be before any general panic sets in. (now)

putbuyer's picture

I know as a RE agent that this is a fuck'n big deal. I have contracts in the works with servicers that I am informing buyers about the potential problem. Attorneys also are unaware. Also, i have a friend who in being foreclosed by GMAC. This issue will blow up very fast as it has already this much. - and Fuck Barry. Don't Tread On Me

Miramanee's picture

Blah blah blah blah fraud. Blah blah blah blah "'s an outrage!..." blah blah blah blah blah blah blah....nothing changes. Human beings are fraud machines. We are wired for greed and duplicity. Blah.

HarryWanger's picture

Yep. And I thought I was cynical! Pretty right on though. If it doesn't interfere with American Idol, they just don't give a shit.

Tortfeasor's picture

Getting kicked out of your home tends to interfere with AI nights.  Lots of people care.  This is not just a GMAC problem.

Miramanee's picture

I'm serious. Human neuropathology predisposes us to primitive thinking, and herding behavior. Every "bubble" is precipitated by the herd piling on in an orgy of abject greed and depravity. Blah.

Dr. Sandi's picture

Looks to me like a LOT of notaries public are going to be doing hard time for their part of this crime. The notaries need to go down hard to send a clear message that their complicity in this kind of fraud will not be tolerated in America.

Village Idiot's picture

Notaries can't be trusted!  But they sure can come in handy.

MsCreant's picture

One can hope Tyler is right about this becoming a national level scandal.

With a minor adjustment to a fine Beatles tune:

Black Swan singing in the dead of night
Take these broken wings and learn to fly
All your life
You were only waiting for this moment to arise

Black Swan singing in the dead of night
Take these sunken eyes and learn to see
all your life
you were only waiting for this moment to be free

Black Swan fly, Black Swan fly
Into the light of the dark black night.

Black Swan fly, Black Sawn fly
Into the light of the dark black night.

Black Swan singing in the dead of night
Take these broken wings and learn to fly
All your life
You were only waiting for this moment to arise,
You were only waiting for this moment to arise,
You were only waiting for this moment to arise