AUGUSTA — Representatives for three attorneys facing possible discipline by the Maine Board of Overseers of the Bar in connection with the filing of unverified documents in mortgage-foreclosure proceedings said Monday that they reported the problem as soon as they knew about it.
The three attorneys, with the Portland law firm Drummond and Drummond, are accused of failing to act after learning that GMAC Mortgage was filing paperwork with unverified information in foreclosure proceedings during the nation’s mortgage foreclosure crisis.
The allegations against the lawyers, who represented GMAC, resulted from a Maine case that had national repercussions, including the temporary suspension of foreclosures by GMAC and other big mortgage lenders. The case also led to congressional hearings and prompted all 50 states to enter a joint investigation into mortgage industry practices.
The three appeared on Monday before a three-person grievance panel for the Board of Overseers of the Bar in Kennebec County Superior Court.
Lawyers representing the accused attorneys – Philip Mancini of Portland, Paul Peck of Portland and Alexander Saksen of Pittsburgh, Pa. – said during opening statements that none of the men were aware of the robo-signing – the signing of mortgage foreclosure documents without verifying the information in them – until news of it “went viral” on the Internet after a June 7, 2010, deposition by a GMAC employee in Pennsylvania on his foreclosure practices. They said the law firm then notified the courts after learning the employee, a foreclosure processor, had signed foreclosure affidavits without verifying their contents.
During the deposition, the employee, Jeffrey Stephan, admitted under questioning by Maine attorney Thomas Cox that, on average, he signed 6,000 to 8,000 affidavits a month without knowing whether the statements in the documents were even true.
Cox had questioned Stephan in connection with a foreclosure case against homeowner Nicolle Bradbury of Denmark in Oxford County. Cox represented her as part of a volunteer program for Pine Tree Legal Assistance.
Cox filed a grievance with the Board of Overseers of the Bar after he informed the law firm what he had discovered during Stephan’s deposition, claiming the firm failed to adequately disclose that it had filed Stephan’s unverified affidavits.
Cox said Drummond and Drummond filed letters to court clerks about the faulty affidavits, but failed to inform the judges in the individual foreclosure cases.
“Those actions were a knowingly ineffective fix to the problem,” Aria Eee, assistant bar counsel for the Maine Board of Overseers of the Bar, said in her opening statements Monday.
After the revelations about GMAC’s practices came to light, attorneys general in all 50 states announced they would investigate the practices of GMAC, JPMorgan Chase Bank, Bank of America and other leading mortgage companies. The investigation focused in part on the “robo-signing” accusations.
Mancini, Peck and Saksen have denied any wrongdoing and have asked that the disciplinary petition be dismissed.
Attorney Peter DeTroy, who represents Saksen, said in his opening statements that Drummond and Drummond hired an outside law firm to step in after learning of Stephan’s admission.
“The firm (Drummond and Drummond) at this point is trying to triage the results of the Stephan deposition,” DeTroy said. “They had no clue of any of the improprieties of Mr. Stephan. There is simply no evidence to suggest otherwise.”
Cox testified Monday that when Drummond and Drummond didn’t file new motions in each foreclosure case with a corrected affidavit, he started a class-action suit on behalf of homeowners in multiple cases.
“If they weren’t going to do anything about it, I was going to do something about it, and we did,” Cox said. “Only a judge ... could determine what needed to be done in light of the false testimony.” Saksen was the only other witness called Monday. He testified that he felt Drummond and Drummond did more than was expected – sending new affidavits to the court clerks in more than 130 foreclosure cases.
“Should we have filed a motion? I guess that’s what we’re here to decide,” said Saksen. He said he was on leave from work because of a family tragedy after Stephan’s deposition, but executed the firm’s response when he returned. “We were trying to prevent any inference that we were conducting a cover-up.”
Witness testimony was expected to resume Tuesday morning.
There is no set timetable for when the grievance panel will decide whether to discipline the three attorneys. Depending on what the panel finds, it could dismiss the petition, dismiss it with a warning, discipline them with a written reprimand or refer the case to a justice of the Maine Supreme Judicial Court with a recommendation for discipline ranging from suspension to disbarment.
Scott Dolan can be reached at 791-6304 or at: