GMAC Halts Evictions In 23 States

GMAC has told brokers and agents to immediately stop evicting homeowners in 23 states. In a memo, the Ally Financial Inc. subsidiary cited “corrective action in connection with some foreclosures” that may need to be taken. Smells like some people got foreclosed on that shouldn’t have, though we’ve been hearing scattered reports about that for a while without the banks doing much, so why drastic action now? Have they uncovered something massive?

According to the document, everything from evictions to cash-for-key transactions are lockouts were to be halted, without exception. Sales of already foreclosed property are suspended. All closing dates will be extended by 30 days, and buys will be able to cancel their purchases and get their deposits back.

Here are the states where evictions are stopping:

Connecticut
Florida
Hawaii
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Nebraska
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
South Carolina
South Dakota
Vermont
Wisconsin

Ally’s GMAC Mortgage Halts Home Foreclosures in 23 States [Bloomberg]

Comments

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  1. smo0 says:

    Nevada isn’t on that list, and I can guarantee you – shenanigans are going down out here…. ALL states need to get on the ball with this.

  2. Loias supports harsher punishments against corporations says:

    GMAC?

    • huadpe says:

      General Motors Acceptance Corporation, now known as Ally Bank, and one of the largest subprime lenders of the early/mid 2000s.

  3. peebozi says:

    Good for them!

    But aren’t they doing a disservice to their shareholders who expect every $.01 of profit that can be squeezed from anyone?!?!?

    Oh, i get it. We just don’t know the loopholes they’re using to make a profit.

  4. peebozi says:

    If “the people” (aka government) asked them to do this I think the answer would be something along these lines: “You know, we’d love to stop the process but these things take time. Maybe in 12-18 months we can try to start the process but I’m not even sure we could stop within that time frame…it really isn’t that much time. We’ll get back to you in 2012 and talk about how to move forward.”

    If “the people” offered them $100,000 above the amount owed on every property then their attitude might be something like this: “We completed that process yesterday…before you finished your sentence. Where’s my fucking money, peasant??!?!”

  5. kriswone says:

    Maybe they realized that the people they are evicting can pay money, maybe not what they are supposed to be paying, but, if they can pay a percentage of their income to the bank, that’s better than the house sitting vacant. it’s not like those houses are gonna sell AT ALL, let them live there and pay what they can pay, money is money, and GMAC already has all the peoples money.

    Which reminds me, PAY YOUR TAXES!!! several businesses need your money to stay sinking!!!

  6. keepntabs says:

    You need to read the original article to get a clearer picture. This Ben guy does a very poor job of proofing, and his grammatical errors makes his summary of the story basically useless.

    • Conformist138 says:

      Um… Ben may have made a spelling error or two, but the linked article says pretty much the same thing. There’s no “clearer picture” presented- just that there are some issues with foreclosures in those states that needed attention, nothing more.

  7. pokinsmot says:

    I love the stop sign! Images were running through my mind to make a stencil and start spray-painting that on every stop sign around! Hmmm….

  8. Thassodar says:

    Hmmm…interesting list. Just a quick question: What’s a “Vermont”?

  9. Tom Foolery says:

    It’s interesting to me that they’ve put this moratorium in place on all loans in the listed states. The investors (Fannie, Freddie, VA, FHA, private investors, etc) set the foreclosure guidelines in the servicing agreement with the bank. Either all of those loans are owned outright by GMAC, or they got all the investors to agree to it…which to my mind means a major screw up somewhere. Also strange is that i can’t make out any pattern to the states listed. There’s judicial and non judicial foreclosure states, states with post foreclosure redemption periods and states without, a geographical mix, and one of the hardest hit states (Florida) but not others (Michigan, Nevada, California).

  10. Max5695 says:

    GMAC most likely is having problems documenting who holds the mortgage. Many mortgages have been sliced up and sold to many investors as securities. That makes it really hard to determine who is the ultimate mortgage holder. They aren’t stopping foreclosures to be nice to people. They are trying to avoid getting sued right now.

    GMAC (formerly General Motors Acceptance Corporation) changed their name to Ally Financial to try to escape their subprime past. Ally Financial and Ally Bank have taken over $17 billion in bailout money from taxpayers. There is serious doubt as to whether Ally will ever be able to fully pay back taxpayers all of the $17 billion.

    I despise Ally Bank and all of it’s lies. They are still GMAC under a different name. They squandered tons of money on subprime loans and predatory lending. They got themselves into this mess and forced taxpayers to bail them out. Now they going into the banking business. “We already took a bailout. Now give us your hard earned savings so that we can make money off of it.” Those stupid brain washing Ally Bank TV commercials drive me crazy. Ally is not straightforward at all, they are hiding their GMAC past.

    • moderndemagogue says:

      You’re partially right. It doesn’t actually make it difficult at all to determine who holds the mortgage; there is MERS, the mortgage electronic recording system. However, MERS has recently started to fail in some jurisdictions — saying that while it may be sufficient in and among the banks to establish title, it is insufficient in the real world of local governments, and that it often violated State and Local law by failing to report changes in title, or that the note was improperly assigned in the first place. Additionally, a court case in Florida was recently dismissed and fraud alleged by the Court against the foreclosing banks because they represented themselves as title owners and not servicers. I’ve posted a lengthy comment which is waiting for approval which goes into a lot of this. Its fascinating, and I wanted to respond to you because you were one of the few on the right track, but its a little more subtle, nuanced, and pervasive.

  11. moderndemagogue says:

    There are two relevant recent cases: 1) was a case in Florida where the Court ruled that Wamu, CTX, and Chase were guilty of committing fraud by representing themselves as owners of a mortgage note, and not simply servicers, which I believe affects their standing to foreclose; 2) There have been several recent cases in California, Nevada, and I believe Ohio in which for the first time, MERS (Mortgage Electronic Recording System, a company and system established by the banking industry for the specific purpose of allowing exotic financial products such as Mortgage Backed Securities and their associated CDOs http://en.wikipedia.org/wiki/MERS) was told it provided insufficient evidence of a chain of title to the mortgage. If my memory serves me, the Court held that MERS was designed to skirt local transfer taxes, filing fees, and legally required public recording requirements, and that without proper up-to-date public records in local municipalities it might even be impossible for an entity to prove it owned a particular mortgage or promissory note.

    Other recent developments: Alan Greyson sent a letter to the Florida Supreme Court asking for further explanation, and immediate action against future predatory foreclosures, stating that this was an unprecedented crime against the public by the banking sector.

    Additionally, all 23 States except North Carolina require judicial hearings before foreclosures, and the list includes all judicial hearing States except for Delaware.

    It is unclear whether it is simply the servicer/owner issue which is causing the halt, or the underlying root assignment issue. Either way, it is far from settled, and could be potentially devastating for any and all banks involved; whether they are simply trying to hide their exposure to REOs, or whether 50 million Americans are going to end up with their homes in the clear.

    In essence, it’s a very messed up situation right now; Barclays believes it to be something to do with the judicial States, and GMAC’s letter is very fishy: http://www.zerohedge.com/article/gmacs-full-letter-agents-something-does-not-add

    Perhaps you guys might want to run a pretty in depth article or series of articles on this? Obviously there are many court cases left, but it has the makings of a particularly serious event; Zero Hedge has had excellent coverage so far.