A Maine Supreme Court justice has ordered the withdrawal of a public reprimand of a lawyer involved in a mortgage foreclosure scandal related to robo-signing documents.
Last April, attorney Paul E. Peck was reprimanded by the state's Board of Overseers of the Bar after it determined Peck continued with several foreclosure cases after a GMAC Mortgage official confessed to not reviewing mortgage documents and had not signed and swore to the truth of foreclosure documents in front of a notary public.
When mortgage company officials admitted that hundreds of foreclosure documents were signed without a thorough review of the cases, as required by law, the case became national news.
Peck was an attorney for a firm called Drummond & Drummond, that worked for GMAC in 2010 when the company pursued dozens of foreclosures in Maine. GMAC was seeking summary judgments in most of the cases, based on affidavits by Jeffrey Stephan, a GMAC "limited signing officer" based in Pennsylvania. Peck appealed the bar reprimand last May.
In a ruling late last week, Justice Andrew M. Mead of the Maine Supreme Court wrote that the bar panel relied on a standard that Peck should have known rather than had actual knowledge that Stephan's deposition testimony was not going to be changed. The applicable section of bar rules "are clearly predicated on conscious malfeasance, not negligence or recklessness," Mead wrote. "The panel does not conclude, nor does the record support the notion, that Peck knowingly undertook any course of conduct intended to foist false statements of fact upon the court in the form of the Stephan affidavits."
Mead wrote that Peck believed that Stephan's deposition would be corrected, but told members of the firm to put affected cases on hold until the matter was resolved. Afger it became clear that Stephans testimony would not be changed, Drummond & Drummond "earnestly undertook" to notify the courts of the problems with the affidavits, Mead wrote.
Stephan had admitted that he didnt review all the documentation in the foreclosure files, checking figures only related to the payments made and amounts owed on the mortgages. Stephan said that he never signed and swore to the accuracy of the affidavits before a notary.
Drummond & Drummond sent letters to the courts where foreclosure cases based on Stephans affidavits were being handled, pointing out the problems with the affidavits. Meanwhile, the firm had won summary judgments for GMAC in six cases and new motions for summary judgments were filed in seven other cases, using Stephan's flawed affidavits, the bar found.