Some of the nation's largest mortgage companies used a single document processor who said he signed off on foreclosures without having read the paperwork - an admission that may open the door for homeowners across the country to challenge foreclosure proceedings. 
 
 The legal predicament compelled Ally Financial, the nation's fourth-largest home lender, to halt evictions of homeowners in 23 states this week. Now it appears hundreds of other companies, including mortgage giants Fannie Mae and Freddie Mac, may also be affected because they use Ally to service their loans. 
 
 As head of Ally's foreclosure document processing team, 41-year-old Jeffrey Stephan was required to review cases to make sure the proceedings were legally justified and the information was accurate. He was also required to sign the documents in the presence of a notary. 
 
 In a sworn deposition, he testified that he did neither. 
 
 The reason may be the sheer volume of the documents he had to hand-sign: 10,000 a month. Stephan had been at that job for five years. 
 
 How the nation's foreclosure system became reliant on the tedious work of a few corporate bureaucrats is still a matter that mortgage lenders are trying to answer. While the lenders may have had legitimate cause to foreclose, the mishandling of the paperwork has given homeowners ammunition in their fight against foreclosure and has drawn the attention of state law enforcement officials. 
 
 Ally spokesman James Olecki called the problem with the documents "an important but technical defect." He said the papers were "factually accurate" but conceded that "corrective action" may have to be taken in some cases and that others may "require court intervention." 
 
 Olecki said the company services loans "from hundreds of different lenders," but he declined to provide names. 
 
 Spokesmen for Fannie and Freddie confirmed Tuesday after inquiries from The Washington Post that they use Ally, formerly called GMAC, to oversee some mortgages. The companies have launched internal reviews to assess the scope of any potential issues. 
 
 Ally, Fannie and Freddie - all troubled mortgage companies that received extraordinary bailouts by the federal government during the financial crisis - declined to say how many loans might be affected. The Treasury Department, which owns a majority stake in Ally and seized Fannie and Freddie in 2008, also declined to comment. 
 
 Fannie and Freddie, created by Congress to finance mortgages and encourage homeownership, have in recent years been repossessing houses at record numbers. Fannie alone reported recently that 450,000 of its single-family loans were seriously delinquent or in the foreclosure process as of June 30. That's nearly 5 percent of the loans it guarantees. 
 
 Lawyers defending homeowners have accused some of the nation's largest lenders of foreclosing on families without verifying all of the information in a case, but it has been hard for them to stop foreclosure proceedings. 

 A JPMorgan Chase emp­loyee has said in a sworn deposition that she routinely signed thousands of affidavits that allowed the bank to foreclose on homeowners without verifying the accuracy of the information in the documents. 
 
 The unverified information included who owned the mortgage and how much was owed on it. 
 
 The statement by Beth Ann Cottrell, an operation supervisor with Chase Home Finance, is similar to those made by Jeffrey Stephan, an executive with GMAC Mortgage, a unit of Ally Bank. It shows that problems in administering a record number of foreclosures may be more widespread than first thought. 
 
 Ally said on Tuesday that the disclosure by Mr Step­han, also made in a deposition, had prompted it temporarily to halt evictions and sales of foreclosed properties in 23 states while it sorted through what it des­cribed as “technical” defects. 
 
 “Our internal review has revealed no evidence of any factual misstatements or inaccuracies concerning the details typically contained in these affidavits such as the loan balance, its delinquency, and the accuracy of the note and mortgage,” Ally said in a statement. 
 
 Tom Kelly, a JPMorgan spokesman, declined to comment. But lawyers who are defending homeowners against foreclosure actions brought by both Ally and JPMorgan said they had found what they considered material discrepancies in key documents. 
 
 In one case signed off on by Ms Cottrell, two separate promissory notes were presented as originals, even though they contained different clauses and monthly payments. 
 
 “They are clearly two different notes,” said Chris Immel, one of the lawyers. “That is not what I’d considered a technicality.” 
 
 In certain states, lenders are able to take possession of properties on which the borrower has fallen behind on payments without a full trial as long as they submit a motion for summary judgment. 
 
 The documents in those motions are supposed to be personally reviewed by the lender and notarised to ensure they are accurate. If lenders are forced to go back through documents submitted to courts, that could slow the foreclosure process to a halt. 

 NEW YORK | 
 
 NEW YORK (Reuters) - GMAC Mortgage, a unit of Ally Financial Inc, asked some outside vendors to suspend some evictions after consumer attorneys and state officials started questioning the documents used in foreclosures, according to lawyers and court documents. 
 
 GMAC suspended evictions in 23 states last week after discovering that employees submitted affidavits containing information they did not personally verify, and that in some cases were not signed in the presence of a notary, a company spokeswoman said on Tuesday. Those states, including New York, Ohio and Florida, require foreclosures to be approved in court. 
 
 "We are reviewing every affidavit in the states in question," Ally spokeswoman Gina Proia said on Tuesday. 
 
 "The substantive content of the affidavits are factually accurate," she said, calling the problem in a follow-up email "an important, but technical, defect." 
 
 A GMAC employee signed off on tens of thousands of affidavits containing information he did not personally verify, according to a deposition taken in December 2009 by the homeowners' law firm Ice Legal PA. 
 
 "Foreclosure defense attorneys have been raising (the problem with affidavits) for a while," said Christopher Immel, the Ice Legal attorney who took the deposition. 
 
 But generally when homeowners' lawyers challenge the affidavits in court, "the banks aren't really withdrawing the foreclosure case, they're withdrawing the affidavit and replacing it with a new one," Immel said. 
 
 The Florida attorney general's office is also investigating "whether improper documentation may have been created and filed with Florida courts to speed up foreclosure processes," by law firms who represent mortgage lenders, according to an August press release from the office. 
 
 The attorney general is not directly investigating GMAC, Shannon Knowles, a spokeswoman for the attorney general's office, said by email on Tuesday. 
 
 But GMAC's decision to suspend evictions "could be a result of our efforts and the attention our office has paid to this issue," she wrote. 
 
 GMAC is not alone in its use of improper documentation, consumer attorneys said. 
 
 "What GMAC has been doing with affidavits ... is no different from what anyone else has been doing in the mortgage servicing business," said O. Max Gardner III, a consumer bankruptcy attorney. 
 
 "This is business as usual for the mortgage servicing industry. GMAC just got caught," he said. 
 
 GMAC's decision to suspend foreclosures due to defective affidavits was first reported by Bloomberg. 
 
 (Reporting by Maria Aspan; Editing by Phil Berlowitz)
– Foreclosure eviction proceedings around the country have ground to a halt after a mortgage company employee admitted to signing off on foreclosures without looking at them. The head of foreclosure document processing at Ally Financial, the nation's fourth-largest home lender, was required to verify information and sign documents in the presence of a notary. He has admitted he did neither, the Washington Post reports. He appears to have just signed everything his team put in front of him—around 10,000 documents per month. Ally's GMAC Mortgage unit has suspended eviction proceedings in 23 states while it investigates, and company execs say hundreds of other companies that used Ally's services—including Fannie Mae and Freddie Mac—may also be affected. Consumer advocates say it is routine for firms to sign off on foreclosures without reviewing the paperwork. "This is business as usual for the mortgage servicing industry," a consumer bankruptcy attorney tells Reuters. "GMAC just got caught." A JPMorgan Chase employee has also admitted that she signed thousands of affidavits without verifying the information, the Financial Times reports.