Attorney Thomas Cox ’66 knew something was off the moment he cast his eyes on a foreclosure affidavit signed by GMAC Mortgage employee Jeffrey Stephan. What Cox couldn’t have known was that he was about to help ignite an uproar over the mishandling of foreclosure cases by some of the nation’s most prominent lenders. Neither could he have guessed the nickname Stephan would soon earn courtesy of the national press: the “robo-signer.”
By exposing Stephan, who casually admitted to Cox that he signed hundreds of foreclosure documents a day with little knowledge of their accuracy, Cox last fall helped to trigger a foreclosure investigation by all 50 states’ attorneys general into heavyweight mortgage lenders and servicers: GMAC, Bank of America, and JPMorgan Chase among them.
Tripping up some of the country’s largest mortgage companies was an unlikely outcome for Cox, 67, who had abandoned practicing law a decade earlier after his work calling in business loans for a Maine bank left his conscience torn and his marriage battered.
Many of the small business owners he had worked with had put up their houses as collateral, and he had witnessed the devastating effect his actions had on their lives. It was a far cry from the career he had imagined as a student at Colby, where a course in international law set him on a path to Boston University Law School. “There I was foreclosing on these people’s homes,” Cox recalled. “These were people I knew.”
Volunteering with the nonprofit Pine Tree Legal Services in Portland was supposed to give Cox an opportunity to gingerly dip his toes back into the profession. Instead it led to the most rewarding event in his career when, in September, GMAC agreed to temporarily stall foreclosure sales and evictions in 23 states, including Maine.
“We’d gotten them to pay attention in many, many cases in many, many states,” he said. In a strange twist of fate, it was largely because of his experience working the other side of foreclosure cases that Cox “was able to close any doors that remained open for creditors to explain away these issues,” according to fellow foreclosure attorney Chet Randall.
Now working pro bono as the head of Maine Attorneys Saving Homes, a project that coordinates pro bono legal referrals for foreclosure cases, Cox stumbled across his own open door when he discovered that GMAC’s Stephan was listed on foreclosure affidavits as a “limited signing officer.” This was an indication that “all he was was a paper signer,” Cox said. “The minute I saw them, I knew they were bogus.”
That first affidavit involved a foreclosure case against a woman named Nicolle Bradbury, who had fallen behind on payments for her modest $75,000 home in Denmark, Maine. Cox took on her case and won approval to depose Stephan in Pennsylvania. “He was totally candid and not seemingly embarrassed or concerned at all with what he was doing,” Cox said.
Stephan acknowledged that, when signing his name to an average of 400 foreclosure affidavits per day, he checked only the balances due and the due date, with no attempt to verify their accuracy. “When you receive a summary judgment affidavit to sign, do you read every paragraph of it?” Cox asked him, according to a transcript of the deposition. “No,” Stephan replied.
In sworn depositions, Stephan said he signed as many as 10,000 foreclosure-related documents per month. He has not spoken to the press.
Cox may never know whether the man since dubbed the robo-signer truly grasped the error of his ways. “I can’t accept the guy didn’t know, but I didn’t ask him that, and I didn’t ask him that because I had gotten a lot of good information there and I didn’t want to risk having [Stephan and his lawyers] walk out saying I was going too far,” he said.
Nicolle Bradbury is now one of six Maine plaintiffs in a class-action lawsuit against GMAC that Cox is trying with five other attorneys. In September Stephan was found to have acted in bad faith in Bradbury’s case, and the mortgage company was reprimanded for continuing such practices even after a Florida court warned it four years ago about the very same signing procedures.
But as the case awaits resolution in district court, GMAC is at it again, Cox charges. A judge dealt a blow to the plaintiffs in December, ruling that the mortgage company could move forward with foreclosure cases in which the supporting factual information had not been confirmed. And yet, “They’re still using Stephan affidavits,” Cox said, incredulous.
A measure of relief arrived in late January, when a district court judge in Portland sanctioned GMAC for filing an affidavit signed by Stephan in another case, ruling it “was on notice that the conduct at issue here was unacceptable to the courts” and ordering the loan servicer to pay a portion of the plaintiff’s legal fees.
Despite his efforts, GMAC continues to evict Maine people from their homes, a fact Cox feels the Maine Supreme Court has failed to address. He took the microphone to say so in January at the Maine State Bar Association’s annual meeting, where he was honored with the prestigious Howard H. Dana Jr. Award for his pro bono foreclosure casework. Before an audience that included three Maine Supreme Court justices, Cox diverged from his prepared remarks to challenge the crowd.
“Nothing is changing in Maine. Foreclosures are still going based on those affidavits,” he declared. “I ask everyone in this room, ‘How can that be?’”
Editor’s note: A version of this story appeared in Mainebiz, a business news magazine where Jackie Farwell is a senior writer.