GMAC Mortgage to Review Foreclosures in Judicial States
Posted on: September 21, 2010No comments yet
Some 23 states will be affected by a halt order on foreclosures imposed by one of the country’s largest home lender.
GMAC Mortgage, the troubled lender that once served as the financing arm of General Motors, said that the moratorium would last for a few weeks or probably until the end of the year. It is meant to review a “potential issue” that it found on the cases.
The affected states are the ones called “judicial states,” wherein the courts mediate between the homeowner and the lender. These include Florida, New Jersey, New York and 20 others located mostly in the Midwest and on the East Coast.
Also known as Ally Financial, GMAC declined to specific the number of cases affected by the review. Although it declined to reveal what the “potential issue” is, homeowners’ lawyers claim they know why.
Lawyers said that the review followed the lawsuits they filed against GMAC. They claim that only a single employee approved tens of thousands of foreclosures across the country. The employee allegedly signed the cases without inspecting the files he was supposed to.
“(The employee) doesn’t know what he’s talking about,” said Thomas Cox, who is representing homeowners pro-bono. He added that the employee also said that the supposed witness to the signing – the notary – was absent during the approvals. “We’ve established that in these foreclosures GMAC hasn’t proven its case,” Cox stressed.
GMAC, which the government has injected with billions of dollars of aid, focused on dealing with subprime loans during the housing boom.
