Foreclosures in Maryland

Revelations that attorneys at two Maryland firms had other people sign their names to foreclosure documents brought a rebuke Wednesday from the O’Malley administration, which called the practice a “potential example of further mishandling and mistreatment of Maryland homeowners.”

Also on Wednesday, several borrowers’ lawyers said they have filed a class-action suit against one of the law firms in federal court in Greenbelt. And attorney general offices across the country — including Maryland’s — teamed up for a joint inquiry into nationwide reports of improper documentation used to foreclose on homeowners.

The Baltimore Sun reported Wednesday that two attorneys, Bethesda-based Jacob Geesing and Hunt Valley-based Thomas P. Dore, acknowledged in court filings that earlier documents submitted in foreclosure cases had been signed at their direction but not actually by them. The documents, called affidavits, are the written equivalent of court testimony and cannot be signed on another’s behalf.

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The lawsuit — filed against Geesing, Howard Bierman, Carrie Ward and their firm, Bierman, Geesing, Ward & Wood — alleges that all three were responsible for “fabricated and counterfeit affidavits” in order to take on more cases than they could handle if they followed the law. The suit contends that the attorneys also directed others to sign their names on deeds for the last six years, clouding the titles on potentially thousands of homes sold to new owners.

“[T]he Defendants’ assembly line foreclosure prosecution became to foreclosure misconduct what Henry Ford was to automobile production,” alleges the complaint, which was provided to The Sun by the plaintiffs’ attorneys. The lawsuit was not available through the federal court’s electronic filing system, but the copy from the attorneys showed the case number and a time stamp dated Wednesday.

Geesing, Bierman and Ward did not respond Wednesday to requests for comment. Dore, who was not named in the suit, also did not return messages seeking comment.

Shaun Adamec, a spokesman for Maryland Gov. Martin O’Malley, said Wednesday that the falsely signed affidavits were one reason why the Democrat joined with the state’s congressional delegation to ask the courts to halt foreclosures for at least 60 days.

“While it’s a separate issue from the robo-signings that prompted the latest dust-up in the mortgage lending world, it is nonetheless another disturbing development in the foreclosure process,” Adamec said.

In “corrective affidavits” acknowledging the signature issue, both Geesing and Dore said that all other information in their foreclosure documents was accurate.

Mortgage servicers, meanwhile, have made similar assertions in recent days in response to court depositions of employees now dubbed “robo-signers.” These staffers say they signed their own affidavits, but in such volume that they did not personally verify the information in the documents, such as how much borrowers owed.

“Our ongoing assessment shows the basis for our past foreclosure decisions is accurate,” Bank of America said in a statement last week when it expanded its freeze on foreclosure sales to all 50 states.

But Richard Cordray, Ohio’s attorney general, said improper affidavits are a serious matter even in cases where the details in the affidavits prove correct. He said the Maryland examples fall into that category.

“Whether they signed it for someone else or whether they robo-signed lots of them, regardless, that’s fraud,” said Cordray, who has filed suit against mortgage servicer GMAC Mortgage. “You’re telling the court under oath, and the court is relying on that evidence to make decisions about taking someone’s property.”

Attorneys general in all 50 states announced Wednesday that they were working together to find out whether mortgage servicers submitted problematic affidavits. Requests from that group carry more weight than initial calls from individual states asking that mortgage companies review their procedures, said a spokeswoman for Maryland Attorney General Douglas F. Gansler.

“Now you have … AGs all coming together with one voice,” said Raquel Guillory, his spokeswoman.

Though it supports the inquiry, the Obama administration said this week that it did not want to see a nationwide foreclosure moratorium, warning of “unintended consequences.” Foreclosures represent a sizable chunk of the housing market today, and analysts have argued over whether a halt to such sales would help or hurt in the long term.

The Mortgage Bankers Association is in the anti-moratorium crowd, saying that servicers move to repossess homes only after “all other foreclosure prevention efforts have failed.”

“Calls for a blanket national moratorium on all foreclosures are a bad idea and would cause significant harm to communities at risk, the unstable housing market and the fragile economy,” the trade group said last week in a letter to Congress that was also signed by other groups representing financial institutions. “A foreclosure moratorium would not change the ultimate outcome for borrowers impacted by this situation.”

But housing counselors and consumer attorneys have long complained that borrowers who should qualify for loan modifications are given the runaround by overwhelmed servicers — while lawyers hired by the firms are pushing forward with foreclosure proceedings. Nina Simon, director of litigation with the Center for Responsible Lending, said a general rush to foreclose was harming the country.

“We think there needs to be some other process for doing what’s in everybody’s interest,” said Simon, who is involved in a class-action suit against GMAC Mortgage. “Every time somebody loses their home to foreclosure, it diminishes the value of their neighbor’s property, it takes revenue away from the locality, it contributes to increased policing activity.”

Attorneys involved in the new class-action suit against the Bethesda-based Bierman, Geesing, Ward & Wood include Jerry Solomon, an attorney who represents Maryland and Florida homeowners in foreclosure. Solomon was looking through case files for clients last fall when he noticed irregularities in signatures.

Geesing agreed to dismiss five cases after Solomon alleged “fraud on the court.” In recent weeks, the Maryland secretary of state removed from office three notaries from Geesing’s firm and three more from Dore’s firm for notary violations.

“I think it would be prudent for the courts to immediately stay any open foreclosures filed by these firms,” said Mike Morin, an Annapolis attorney who is also involved in the class-action suit.