Legal Briefing: The Technicality That Led GMAC to Halt Foreclosures

A daily look at legal news and the business of law:

GMAC Halts Some Foreclosures Because It Filed "Technically" False Court Documents

In foreclosure actions, a bank has to prove it owns the mortgage. The common way to do it when starting a foreclosure is to file a sworn and notarized affidavit alleging all the necessary facts. Turns out that many such affidavits by Ally Bank subsidiary GMAC Mortgage were signed by people who didn't personally know if the information in the affidavits were true, and at times, didn't get the affidavits notarized.

The signers relied on the law firms preparing the documents to get the information right and didn't check against GMAC's databases. GMAC asserts that none of the information in the affidavits was false, and thus the mistake was purely "technical." But given that its employees were routinely signing 10,000 affidavits and other mortgage documents a month, I'd be surprised if the law firm prepping the docs didn't make any mistakes.

Foreclosure cases have already been derailed because of banks targeting the wrong homes, and preventing such errors is the point of the requirements GMAC violated. At least three foreclosure law firms are being investigated for fabricating lots of documents.

Bloomberg quotes one foreclosure defense attorney as saying: "All the banks are the same, GMAC is the only one who's gotten caught." So, it'll be interesting to see if anyone else makes similar disclosures in the coming months. Note to homeowners facing foreclosure: Be sure to make the bank prove it really does have the right to foreclose against you.

Ninth Circuit Strikes Down Oregon Laws Against Giving Minors Sexually Explicit Material.

As the Recorder put it: "It shouldn't be illegal to sell a Judy Blume novel to a little girl." And now that two Oregon laws have been struck down by the Ninth Circuit Court of Appeals, it's not. Oregon admirably wanted to reduce child sexual abuse. To do so, it went after the practices of "grooming" and "luring" the victims.

Unfortunately, Oregon wrote its laws so broadly that a large amount of constitutionally protected speech would have become illegal -- so much so that booksellers would have to beware of selling even some of Judy Blume's novels to a teenagers under 18. If Oregon was really talking about hard-core pornography, as the state argued, it should have said so, the court noted.

Caffeine Made Me Kill My Wife--er, Confess Falsely

Kentuckian Woody Will Smith, who's facing murder charges in the strangulation death of his wife, first claimed that he was so hopped up on soda, energy drinks and diet pills that he couldn't form the necessary intent to be guilty of killing his wife -- much like theLaw and Order "Thin Ice" episode defendant, who claimed that "sports rage" so clouded his mind that he couldn't form the intent to be guilty of killing his son's hockey coach. The Thin Ice defendant was convicted, and probably Smith would have been too, which may be why he later changed his tune.

In the latest court filings, the Associated Press reports, the defense claims the caffeine so warped Smith's brain that he falsely confessed to the murder. In fairness to Smith, he was apparently far more than normally sleep-deprived and juiced. He says he he believed his cheating wife would leave with their kids if he went to sleep. Moreover, it's true that false confessions happen and result in innocent people being convicted, so I don't want to dismiss out of hand the idea the confession is false. But it does bother me that it was only after some evidence from the victim's fingernails allegedly pointed away from Smith that he shifted from an insanity defense to a false-confession defense. Perhaps Law and Order Los Angeles would like to reprise this case someday.

Attorney Crime

A Wisconsin district attorney who sexted a domestic-violence victim while prosecuting the perpetrator has taken medical leave amid new allegations, reports the ABA Journal. The woman to whom Ken Kratz sent the unwanted come-ons says that right before the messages started, Kratz told her he was thinking of reducing the charge her ex-boyfriend faced for trying to strangle her from a felony to a misdemeanor. Smells like blackmail.

But it's not the only new twist. As I'd hoped, at least one other woman has come forward, alleging that Kratz revealed confidential information about an ongoing investigation to her after meeting her on a dating site and inviting her to witness an autopsy, provided she wear a skirt, high heels and be his girlfriend. Are these the only two women he's inappropriately interacted with?

Although Kratz continues to insist he won't resign, Governor Jim Doyle (D) appears interested in removing him from office, promising to hold a hearing to determine if he should do just that as soon as he gets a complaint from a taxpayer.