GMAC Mortgage Expands Review of Foreclosures
Amid growing inquiries by law enforcement into dubious paperwork by home lenders, one of the nation's largest, GMAC Mortgage, said Tuesday that it was expanding its review of foreclosures to all 50 states.
The company said it was hiring legal and accounting firms to conduct "independent reviews of the foreclosure process.
In addition, GMAC, which is part of Ally Financial, said separate specialized teams of its own employees, along with hired lawyers, would scrutinize every one of its foreclosure cases in the nation to make sure they complied with the law and that "home preservation" options were considered.
GMAC had previously imposed a suspension on foreclosures in the 23 states with judicial review of the proceedings so it could ensure they were done properly. Several other major lenders subsequently announced suspensions of their own that were limited to foreclosures in those 23 states.
But last Friday, Bank of America announced that it was expanding its suspension of mortgages to all 50 states, and some lawmakers and consumer groups have pushed for other lenders to do the same.
GMAC's announcement stops short of halting foreclosures in each of the states, favoring reviews instead. After each case is scrutinized, the foreclosure process will resume if everything is in order. To date, GMAC has not found any evidence of inappropriate foreclosures, officials there said.
"We are taking these additional steps to restore the confidence in the process, which is critical for the stability of the home and mortgage industry," GMAC officials said in a statement.
GMAC's announcement came on a day when law enforcement officials vowed to increase their scrutiny of foreclosures, particularly the practice of signing thousands of affidavits without proper review, known as robo-signing.
Several dozen attorneys general plan to announce an investigation on Wednesday into the foreclosure practices of major home lenders. The Iowa attorney general, Tom Miller, in an interview on CNBC, said the focus, at least initially, would be on the use of robo-signers to sign off on affidavits.
