– By GLENN JORDAN

Staff Writer

In what has become a high-profile case, Maine’s highest court refused Tuesday to find a mortgage company in contempt for signing a sworn document in support of foreclosing on a woman’s home without reviewing pertinent records.

The case gained national attention when the woman’s attorney found that GMAC Mortgage and other banks had engaged in a pattern of “robo-signing” such documents – processing them quickly for use in foreclosures without reviewing records to verify the information. The revelation led to a freeze on home foreclosures across the nation, congressional hearings and investigations by attorneys general in several states, although not Maine.

By a 5-1 margin Tuesday, the Maine Supreme Judicial Court upheld a lower court’s decision against imposing sanctions on GMAC or the Federal National Mortgage Association — Fannie Mae — or finding either in contempt.

The case centered around an attempt by Fannie Mae in 2009 to foreclose on the Denmark home of Nicolle M. Bradbury, who purchased it for $75,000 in 2003 but was unable to pay the monthly mortgage bill of $474 after losing her job several years later.

Attorney Thomas A. Cox, representing Bradbury for free through Pine Tree Legal Assistance, discovered while deposing a GMAC employee that the practice of robo-signing documents was prevalent throughout the mortgage industry, not just by GMAC but also by larger lenders such as Bank of America and J.P. Morgan Chase. The term “robo-signing” caught on quickly.

In September 2010, Bridgton District Court Judge Keith Powers ordered GMAC to pay Bradbury’s attorneys nearly $24,000 for submitting the foreclosure affidavit in bad faith on behalf of Fannie Mae. The foreclosure case against Bradbury was dismissed so documentation could be properly prepared.

But Powers stopped short of finding GMAC in contempt, although Maine Rule of Civil Procedure 56(g) would have allowed such a finding, and the high court agreed.

In the majority opinion issued Tuesday, Supreme Court Justice Ellen Gorman noted that no state or federal court had ever issued a finding of contempt on the basis of bad-faith affidavits.

“Against this backdrop of precedent, and given our highly deferential standard of review,” Gorman wrote, “we cannot say that the trial court abused its discretion in declining to be the first court in the nation to employ Rule 56(g) contempt sanctions.”

GMAC, largely owned by the U.S. Treasury after a $17 billion federal bailout in 2008, is now a subsidiary of Ally Financial Inc. In a written statement, Ally spokeswoman Gina Proia said that “GMAC Mortgage is pleased with the court’s ruling.”

When asked about GMAC restarting foreclosure proceedings against Bradbury, Prioa said, “We cannot comment on the details related to a specific borrower’s case.”

Cox continues to pursue a class-action case against GMAC seeking punishment against the company for its foreclosure practices. He said he was disappointed with Tuesday’s decision, particularly after reading Gorman’s harsh words for the bank’s “reprehensible practice” of “fraudulent evidentiary filings” that the court found “ethically indefensible.”

“I think the level of criticism of the misconduct was good to see,” Cox said. “I was gratified to see them recognize the severity of it, but disappointed to see the lack of remedy for it.”

Justice Jon Levy wrote a dissenting opinion, noting that a Florida court had sanctioned GMAC in 2006 for “engaging in the very same practices” and concluding that “the court should have conducted a hearing before it determined that a finding of contempt was not warranted.”

Staff Writer Glenn Jordan can be contacted at 791-6425 or at:

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