Tom Cox of Portland knew he was onto something that day in June 2010 when an employee for GMAC Mortgage casually admitted that, no, he didn’t even come close to reading the thousands of foreclosure documents he signed each day.

But never did Cox, a volunteer attorney for Maine Attorneys Saving Homes, expect this.

President Obama on Thursday unveiled a $25 billion settlement by which the financial industry will pay at least in part for the many abuses that led to the meltdown of the nation’s housing market from 2008 through 2011.

And Cox, who spent a good chunk of his career helping banks foreclose before deciding in retirement to help out the other side, deserves much of the credit for exposing one of those abuses.

He blew the whistle on the “robo-signing” of affidavits, financial statements and other documents by mortgage industry workers who hadn’t a clue what they were certifying.

Can we say “vindication?”

“I think that’s too powerful a word, from the way I see it,” Cox replied after news broke of the settlement. “For me, it’s recognition of the problem.”

A little background:

One day back in 2010, as a volunteer for Pine Tree Legal Assistance and its spinoff Maine Attorneys Saving Homes, Cox pulled the file of Nicolle Bradbury of Denmark. Like thousands of other Mainers, she faced foreclosure on her modest home after losing her job and falling behind on her $474 monthly mortgage payments.

Hopeless? It appeared so — at least until Cox flipped through the paperwork and noticed the signature of one Jeffrey Stephan, a “limited signing officer” for GMAC, appearing over … and over … and over …

Stephan, Cox suspected, knew little if anything about Bradbury’s situation. And so off Cox went to Pennsylvania to depose the man with the perpetually moving pen.

“I thought it was going to take me five or six hours to pick this guy apart,” Cox recalled.

And?

“It came really easily.”

Stephan told Cox that he handled upwards of 400 foreclosures a day for GMAC, meaning he signed upwards of 8,000 documents per month. And — despite all those “I hereby swear” statements — Stephan readily admitted that the mountains of paperwork had been reviewed by neither him nor anyone else.

“I remember thinking, ‘Holy cow! Look what I just got,’” Cox said.

GMAC — whose parent company, Ally Financial, is part of this week’s settlement — tried at first to prevent public disclosure of the deposition. Portland District Court Judge Keith Powers refused.

Then all hell broke loose.

GMAC suspended foreclosures nationwide until it got a handle on the rapidly spreading robo-signing scandal. Other banks followed suit. The nationwide flood of home foreclosures, for the time being, slowed to a trickle.

And Nicolle Bradbury? She has stayed put, Cox said, while GMAC refuses to accept even partial payment from her, for fear of losing its right to foreclose.

Which brings us back to this week’s $25 billion settlement between the big banks (in addition to Ally Financial, they include Bank of America, Wells Fargo, JPMorgan Chase and Citigroup), the U.S. Department of Justice and 49 state attorneys general — including Maine Attorney General William Schneider.

Maine, with its recent average of abut 6,000 foreclosures a year, will get a mere $21 million.

Of that, $7 million will go to direct relief for borrowers who are in default on their mortgages, $1.9 million will be cash compensation for those who already have lost their homes, and $4.5 million will help borrowers who are current on their payments refinance their loans.

That leaves $8.2 million for foreclosure prevention programs, legal assistance to homeowners and the state’s general fund.

That $8.2 million means a lot to Cox, who continues his volunteer work to this day and laments that Pine Tree Legal Assistance has but one paid staff attorney to help poor Mainers fend off foreclosure.

“We’re all on pins and needles here, saying we really need a substantial chunk for housing counseling and defense work,” Cox said. “And I’m terrified that our governor is going to see this as a solution to his (Department of Health and Human Services budget) problem.”

(Cox’s fears are well-founded. Contacted late Thursday, Attorney General Schneider said the $8.2 million will be carved up three ways — $500,000 for Pine Tree Legal, $2 million for the Maine Bureau of Consumer Credit Protection, and $5.7 million for the general fund.)

Cox is the first to say that the settlement, which ultimately could benefit almost 2 million current and former homeowners nationwide, didn’t go far enough.

He likes the fact that, from now on, banks must adhere to strict standards for servicing loans. But he still wonders who exactly will enforce those standards.

He likes the fact that most of the $25 billion will go to homeowners who took it on the chin, but he doesn’t think it comes close to “the magnitude of the fraud that’s been committed” by the banks as they danced around their due diligence and knowingly loaned money to people who were woefully incapable of paying it back.

Still, all things considered, this is pretty good news. And if you’ve long thought those do-gooders down at Pine Tree Legal Assistance are no match for the legions of pin-striped lawyers employed by all those banks, think again.

“All I was shooting for was, I wanted the (banks) to know that Maine was a special place where you really had to play honestly and by the rules,” Cox said. “That was my goal.”

Done.

Columnist Bill Nemitz can be contacted at 791-6323 or at:

bnemitz@mainetoday.com