Coming over the wire: GMAC Halts Home Foreclosures In 23 States
Ally Financial Inc.'s GMAC Mortgage unit told brokers and agents to halt evictions tied to foreclosures on homeowners in 23 states including Florida, Connecticut and New York.
GMAC Mortgage may "need to take corrective action in connection with some foreclosures" in the affected states, according to a two-page memo dated Sept. 17 marked "urgent." Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to immediately stop evictions, cash-for-key transactions and lockouts, according to the document, addressed to GMAC preferred agents.
Naked Capitalism has the full scoop on what is going on. I will keep updating this blog as more information comes in.
Update (1:30pm): Finally, and update from the Washington Post:
Ally Financial spokesman James Olecki in a phone interview said that the 23 states that the memo mentions are the ones that "follow a more judicial foreclosure process."
"We are going back to review our process in those states and continue to remove states we have confirmed all requirements have been met," Olecki said.
He said the company is "committed to preserving the integrity of the foreclosure process and if any corrective actions are needed, we will take immediate steps to make sure they are implemented."
Olecki said the company has no evidence that procedures were not followed in any individual cases and declined to comment on any internal or external investigation that may have prompted the review.
The reason why this is so big, is that the U.S. Treasury Department owns a 56.3 percent stake in GMAC. Keep that in mind.