GMAC Buys Your Mortgage, Tosses It In A Drawer

How are things in the mortgage industry today, in what is supposed to be the post-robosigner era? According to source on the ground, reader Chris, it’s not so great. Chris writes that when he and his wife refinanced their house, they knew that GMAC would most likely buy their loan from the mortgage originator. What they couldn’t have predicted was that GMAC would wait around for more than a month before they got around to actually acquiring the mortgage, then call Chris and tell him that he was delinquent on the mortgage that he had already paid.

I just thought I’d share a quick story of how insane things appear to
be in the mortgage industry these days.

My wife and I refinanced our home in November to lock in a lower
interest rate and reduce our monthly payment. We worked with a local
mortgage originator and were told at closing that GMAC would more than
likely be purchasing the new mortgage from them. The first payment
was due January 1st and we were instructed to make the payment to the
originator if we had not yet heard from GMAC by then. We did exactly
that and our first check for the new mortgage was cashed on December
31st. As of today, we still have not received anything at all from
GMAC or anyone else about the new mortgage.

This afternoon I answered my cell phone and heard a recorded message
that GMAC was trying to reach me. Interested, because we have no
relationship at all with GMAC at this time, I held on the line until a
gentlemen spoke, asking me “Am I speaking with (my first and last
name)?”

I confirmed that he was speaking to me and asked who he was,
explaining that I have no relationship at all with GMAC. He responded
by telling me he was calling about the property at my address. I
reiterated that I have no relationship with GMAC and demanded that he
explain what the purpose of the call was. He coldly stated that he
was calling regarding a delinquency on a mortgage for the property at
my address.

At that point, I demanded his name and extension and told him we were
through speaking but he should expect to hear from my mortgage
originator.

After several calls with the originator, they were able to explain
what happened. Apparently, GMAC indicated they wanted to buy the
mortgage back in November, when we closed on it, but never actually
purchased it (and I’m sure I’m not using the correct industry
terminology here) until YESTERDAY, January 11th. The originator did
receive my payment for the 1st but were unable to send it to GMAC
until GMAC officially owned the note.

So, GMAC let my note sit with the originator for more than a month and
a half before they actually purchased it. Then, one day after they
took ownership, it was flagged in their computer as delinquent and
they immediately called me about it.

Maybe this story is a one-time thing and isn’t a Consumerist story,
but it seems to me the mortgage companies like GMAC would want to be a
little cautious about making collection calls in this post
robo-signing world. Calling a guy who HAS paid his mortgage the day
after you took over his note, before you’ve even told him you now own
his mortgage is not a great way to start a long-term customer
relationship. At least not in my book.

Comments

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  1. Mr. Fix-It says: "Canadian Bacon is best bacon!" says:

    I blame Dawes Tomes Mousely and Grubbs Fidelity Fiduciary Bank.

    Things just started going downhill with them, and everybody followed.

  2. chucklebuck says:

    The same thing happened to us with GMAC (not a refinance though – they got our mortgage when our first lender went bankrupt). To be fair about it, they cleared it up immediately and there’s been no problem with them since.

  3. keepher says:

    Actually this type of thing has happened many times in the past 20 years or so. I knew a number of people doing battle over late payments that weren’t late with banks they didn’t know they even had a relationship with because their mortgages had been sold without notification. When securitization of mortgages started it became a game of who actually owns the paper.

  4. Hoss says:

    Maybe if he wasn’t so difficult w the person at GMAC, they would have seen the issue and promptly apologized. Seriously, he sounds like someone coming unhinged

    • Pax says:

      Difficult? Difficult how?

      GMAC had never informed them of an actual purchase of the mortgage.

      GMAC, furthermore, was claiming they were in arrears even though they were up to date, and the entire confusion was based on an internal error within GMAC, because GMAC dragged their own feet.

      The fault is 100% GMACs.

      Stop playing “blame the OP”.

      • Firethorn says:

        Stop playing “blame the OP”.

        Personally, I think that being politeness tends to go a long ways, as does a certain level of cooperation. From the tone of the article I also got the impression of impoliteness, even combativeness.

        The phone call itself may have been completely different, of course.

        • coren says:

          Politeness, like “Hi, I’m Jim from GMac and I’m calling about your mortgage. Before we continue can I verify your name please?” rather than not explaining the first time the OP asked, or making the OP ask at all.

        • Pax says:

          Politeness like properly notifying the OP of GMAC’s acquisition of their mortgage debt?

          Politeness like starting the phone call, not with an accusation of being in arrears, but a simple question along the lines of “When did you make your last payment to your loan originator”, providing the OP with the opportunity to point out that he was on-time as of GMAC’s acquisition of the loan?

          Politeness, like NOT ASSUMING THE OP WAS A DEADBEAT …?

          IOW, “politeness that GMAC was entirely lacking in” …?

    • anime_runs_my_life says:

      Here we go with another blame the OP post. How was he difficult? If I get a call from a company I’ve never done business with demanding money for something I’ve never purchased/entered into an agreement with, I’m not going to just open my checkbook and read off my account number without getting the facts first.

      GMAC dropped the ball here, plain and simple.

      • SBinVA says:

        I agree 100% and do the same thing. In today’s world of nasty debt collectors, scam artists, etc, there’s no way I’m talking to anyone on the phone about anything unless I know it is valid and I’m talking to a legitimate representative. Even then, I want it in writing.

        I thought the OP handled the call perfectly, bravo!

    • Loias supports harsher punishments against corporations says:

      Hoss, I’m so glad I was able to contact you. I am from Lawson Hyatt Credit Union. I wrote to inform you that you are delinquent on a car loan you have with us for a 2010 Ford Explorer. Your payment of $573.14 was due on January 3rd of 2011. Please respond here with your checking account and routing number so that we ca process a prompt payment.

      Thank you and have a nice day.

    • healthdog says:

      What if the outcome of this story was that the person calling was not from GMAC, but a scammer? Would you then be blaming the OP for even speaking with someone they knew they did not have a relationship with in the first place?

      • Hoss says:

        Ok, then why return the call?

        • coren says:

          He didn’t, he got robocalled. Him trying to ascertain the reason for the call makes good sense regardless of the call being legitimate, a scammer, or a case of mistaken identity of some variety (or anything else)

    • ovalseven says:

      I didn’t get the impression that the OP is looking for an apology, so his mannerism isn’t what’s important here.

      • MeOhMy says:

        It’s not important per se…but it is pretty weird….by his own account he was quite combative from the get-go before, declaring more than once that he has no relationship with GMAC and then “demanding” to know the nature of the call….even weirder since he knew he was _supposed_ to have a relationship with GMAC, so it would not even seem like a random telemarketer.

        No need to be rude to the guy before you even know why he’s calling you – it’s not like he personally stuck the mortgage note in his desk drawer and forget to send you a payment coupon.

        • inkling79 says:

          “We worked with a local mortgage originator and were told at closing that GMAC would more than likely be purchasing the new mortgage from them.”

          They were never told that GMAC had definitely taken over their mortgage. When GMAC did finally call, he simply stated that he had no relationship with GMAC and inquired about the nature of the phone call. He wasn’t being rude.

          • MeOhMy says:

            You say “inquired,” but in his own words he said “demanded.” Those two words have very different connotations. He also “demanded” the caller’s name and extension and “told him we were through speaking but he should expect to hear from my mortgage originator.”

            This does not sound combative to you?

            In my head I do not hear this as “May I have your contact information, please? I’ll have my broker give you a call. I’m sure we’ll get this sorted out quickly. Thanks!”

            Like I said…it’s not “important” as far as exonerating GMAC for the error, but generally things go more easily/quickly if you’re at least polite to the people you speak to.

            • ChuckECheese says:

              See, I don’t mind the mild aggression, because it makes the point clear that the caller’s approach to the matter is unacceptable. Being overly polite to people behaving rudely either encourages them, or at the very least, doesn’t discourage their inappropriate behavior.

            • coren says:

              He didn’t demand until after he asked and the GMAC employee didn’t provide the information he asked for. To me someone asking me for my information from a company that I do not have a relationship with (because to his knowledge, they didn’t) and being sketchy on providing their information screams “scam!” to me.

        • ChuckECheese says:

          More often than not, businesses call me and ask me for identifying information without identifying themselves and the reason for their call first. This is a pretty serious offense against decent behavior, it’s a fraud risk, and I get a bit testy too. When it happens, I do not answer their questions, but ask several of my own. I say, “Before I answer any questions for you, I need to know your name, the name of your business, a telephone number to reach you, and the reason for your call. If you cannot or will not provide this information right now, I will disconnect the call.”

          So I think it is appropriate for the OP to be a bit annoyed and defensive regarding personal financial business, until he is clear who he’s talking to and why, and if the call is appropriate. And people of the internet, you need to realize that there is a big difference between showing annoyance or impatience, and unacceptably abusive behavior. It is normal and appropriate to become annoyed when you’re talking to a stranger who is asking you questions without first identifying themselves and providing an explanation for their call.

  5. Alessar says:

    Why wasn’t the payment of 12/29 applied to the mortgage so that when it was sold to GMAC that was already credited toward the balance?

  6. Kryndis says:

    I also refinanced in November for the same reasons and my mortgage was sold (in my case, to Wells Fargo). The letters they sent me notifying me of the sale came in early December (my first payment for December went to the originator) and the sale officially took place on the 1st of January.

    In the notices they claimed they were legally required to inform me of the sale something like at least 15 days before it actually took place. They also informed me that payments made on time to the original mortgage owner for the first three months after the sale would be forwarded to Wells Fargo and would have to be considered on time.

    In other words, sounds like GMAC screwed up pretty badly here.

  7. OldSchool says:

    It seems to me that if the whole mortgage system was de-securatizes (ie.. disallow the sale of mortgages entirely) that most of the problems with our current system would be eliminated or greatly reduced.

    Put simply … if you fund a mortgage you would be stuck with it for the duration of the contract just like the homeowner

    On more then a few occasions I have realized that I should be thankful that I obtained my mortgage from a small, privately owner company that does not sell their mortgages to others.
    As a result I have never experienced any of the hassles I hear about from others. On the very raare occasions I have had to deal with them they have been nothing but delightful to work with,
    kindof like working with my Credit Union as opposed to a bank ….

    • Erich says:

      “……I obtained my mortgage from a small, privately owner company that does not sell their mortgages to others.”

      We did that. Then the entire company was bought out by World Saving, who were bought by Wachovia, who were bought by Welles Fargo.

    • stormbird says:

      Canada has a more regulated banking system that didn’t allow this type of insanity and they’ve handled the Great Recession rather well, to the point where Canadian Dollars are worth more than American Dollars (to someone that went to Niagra Falls when the exchange rate was $1.3 CD to $1 AD, it’s freaky).

  8. Loias supports harsher punishments against corporations says:

    The month delay is not unusual. When you purchase a home, or refin, you are told to pay the originator for thr 1st 3 months to allow a transition to the eventual purchaser of the mortgage.

    What is odd here is what Chris described in the second to last paragraph – that on the first day of owning the mortgage they call about a delinquency. They should know better how the process works.

  9. Blueskylaw says:

    When the left hand doesn’t know what the right hand is doing, when you are no longer considered a person but a problem, when criminal actions are not only condoned but insisted upon to achieve greater profit, you know your business model is broken and you deserve the breakup hammer.

  10. Rebecca K-S says:

    Obviously this is not a cool situation, but it’s interesting; usually when people write these stories, they cast themselves in a flattering light, but he really just makes himself sound like a total dick.

    I dunno. GMAC has treated me just fine, fortunately.

    • Loias supports harsher punishments against corporations says:

      Voicing other comments – I, too, would be upset if a company contacted me when I have no business relationship with them telling me I am delinquent on a payment I don’t have with them (to my knowledge). That’s what scammers do. So I would be pretty livid.

      • Rebecca K-S says:

        I totally understand his upset and think he was absolutely in the right in not just following along, but all the “I demanded” crap translates to me as “I’m a dick.”

        • Loias supports harsher punishments against corporations says:

          Should you be polite and courteous to scammers?

          • Rebecca K-S says:

            The fact that he doesn’t know the call to be legitimate doesn’t mean that he knows it to be a scam. Yes, one should make an effort to be courteous and polite to people who are just doing their jobs until one has reason to act otherwise. The misfortune of RECEIVING A PHONECALL does not, in my book, warrant getting all demanding and pissy.

            • Pelonis says:

              Getting a phone call from someone unknown who says you owe them money and you never received any paperwork about it = scam 90% of the time.

              I’ve personally received several similar calls, one about a car loan, and I don’t own a car or a house.

              Grow up and stop saying that it’s the OP’s fault or that the OP should have been nicer. Being nice in these situations will get you burned.

    • levelone says:

      I don’t think he was a dick. I think he was rightly suspicious since he didn’t have a business relationship with GMAC until the day before the call, and they didn’t bother to notify him in any way other than to try to call the next claiming he was delinquent. He was smart not to give any information to GMAC before talking to the originator and confirming. Plus, he didn’t let them treat him like crap over their own mistake. I wish more stories were like this instead of the OP letting the bank or whoever screw them over first (where they had any control over it, anyway) and then asking what can be done to salvage the situation.

      • Rebecca K-S says:

        I don’t think he was a dick for protecting himself, for refusing to give any information, for ending the phone call and asking the mortgage originator to explain the situation. All of that is just being a smart consumer. And I don’t know, maybe the conversation went down much more cordially than described, but his choice of phrasing in describing that call (“I demanded” [repeatedly], “he coldly stated”) comes of as pretty entitled and rude to me.

        • coren says:

          Well he didn’t demand until the guy wasn’t forthcoming about information. It took him three tries to get this GMAC employee’s name.

    • mrscoach says:

      His ‘demand’ could have been as simple as him asking “Why are you calling me?”. You are upset because after the fact he stated that he ‘demanded’ to know something. He had already pointed out that he had informed the caller that he had no relationship with GMAC, so was well within his right to know what the call was about. He was also well within his rights to know the callers name and extension.

      Even if he had said “I demand to know why you are calling me,” he would have been within his rights. The guy called him, not the other way around. If someone calls me and says they are from some company I have no business with and won’t tell me why they are calling, other than it is about ‘the property at my address’, I will also demand to know WHY they are calling.

      Quit being so judgmental about the OP, you are seeming like a dick, yourself.

  11. MeOhMy says:

    I had a weirdness with GMAC as well…I think it was around 2005 when they bought one of my mortgages. The letter notifying me came with specific instructions that my next payment should go to my current lender and the following payment should go to them.

    Well they sent the letter too soon or something, because I sent the next two payments as instructed, first to my original lender and the next to them… and after the 15th of the second month I got a call from the original lender asking why they had not received my payment and I was like “Because…you sold the note to another lender….?” Turns out that didn’t go into effect until the following month.

    Pretty easy to get it sorted out but I was definitely left scratching my head thinking that GMAC surely buys and sells notes all the time so this should be a pretty well-developed process free of such silly errors…I never had any other issues with them, but I was not sad when they sold the note on to another lender a few months later.

  12. njack says:

    Sounds like par for the course with GMAC. I had been with GMAC for nearly 10 years with my mortgage and recently refinanced. I couldn’t wait to get away from GMAC due to numerous customer service issues. I was so happy to get rid of them, then found out BofA purchased my refi. Out of the frying pan and into the fire I guess, but so far no issues with BofA, knock on wood.

  13. truthandjustice says:

    Simple solution to all this mess:
    1) In Canada, the original lender MUST hold the mortgage until it is paid in full by the borrower.
    2) Because the original lender OWNS the deal, their due diligence is methodical and complete.
    3) Because of 1) and 2) — Canadian banks did not get mired in the mortgage meltdown.

    Note to America: Remove the profit maximization at all costs and all risks — and it does NOT come back to bite you!
    Results: Legitimate business practices, with all parties acting legitimately, reasonable returns on investment, = GOOD OUTCOMES GUARANTEED.
    Go figure!

  14. horns says:

    I have GMAC and they do in fact suck.

  15. Buckus says:

    This all seems about right. Banks not learning from the past? SOP.

  16. Red Cat Linux says:

    I found out I had qualified for my first home loan through my insurance agent.

    The mortgage agent for the originator, PNC, was a dick. At no point, ever, did PNC tell me that I had been given the loan. And I asked point blank on several occasions. On the phone. When arranging appointments. During closing. Signing the documents. You get the idea.

    If someone cold called me asking about my mortgage, I’d stonewall them too.

  17. AustinTXProgrammer says:

    This happens when mortgages are purchased. You knew they were likely to buy your mortgage, why did you have to be difficult on the relationship?

    You tell them you paid the originator and they need to sort it out. You want the jerk on the other end of the line to be on your side.

    • kpsi355 says:

      No I don’t. Agents are so tied up with rules that there’s almost no chance they can ‘go to bat’ for you. What I would want, is to:
      A. Make sure this isn’t a scam
      B. Make sure I am able to document exactly what happened if/when I have to take legal action
      C. Assert my rights to protect myself.
      There is no correspondence on anyone’s part that the mortgage has been bought or sold. No notification whatsoever. And even if there had been, he’s already paid everything he owes at this point. This phone call was a demand for payment, by someone who has no justification for doing so.

      The OP’s absolutely right when he decided to gather information, and find out what was going on. And he absolutely should not have given any information out. I would not even have admitted to having a mortgage. As far as I know it’s no one’s business but mine and my family, the originator, my insurance, and the state.

  18. Cosmo_Kramer says:

    Does it seem to anyone else like the OP’s initial animosity toward GMAC was unwarranted? The way he tells the story he was combative with them from the start. What do you gain from that? He knew what they were calling about but made no effort to try to resolve the situation with GMAC.

  19. Keter says:

    This isn’t new. I took out my mortgage with a local bank, which then sold it to Countrywide, and left a payment in limbo. It took about a dozen phone calls and two letters to straighten out that mess.

    It should be illegal to sell mortgages like that – the buyer makes a contract with the mortgage holder, and should have to give permission to allow it to be sold. If that step was in there, this stuff would stop.

  20. phixional-ninja says:

    I know it’s GMAC not GMACS, but it still sounds like something Ubuntu might roll out to make Linux seem cooler… Or a great stage name for a protégé of MC Frontalot.

  21. JiminyChristmas says:

    I find this article a little confusing. In some cases it sounds like they are talking about bank-owned properties that aren’t legally registered and maintained.

    In others, it reads as if the bank initiated foreclosure proceedings, the residents left the property, and then the bank never finalized the foreclosure. If that’s the case, it’s a sad situation for the former owners – they don’t think the property belongs to them anymore but the title is still in their name and fines and liens on the property are piling up.

    What I don’t understand is how banks like BofA or Wells Fargo would be able to walk away from a property. Whether it’s a money-loser or not the banks have the assets to maintain it. If they don’t and leave it up to the City to board it up or mow the grass, I don’t see how the banks can evade responsibility for the costs the City incurred.

  22. kanderson321 says:

    Oh, hell, our loan was bought by Homecomings (otherwise known to us as Shortcomings), which became GMAC. Homecomings did the exact same thing to us. We got a letter from our mortgage originator giving us a transfer date of January 1st. We paid our December mortgage payment to the original mortgage holder as instructed by the letter.

    We then got the call on January 5th — “You’re late.” When I argued, they were insistent that I’d not followed the instructions correctly. I read the letter out to them over the phone. The representative’s response was that they’d actually bought the mortgage two months before, but the letter had the wrong date on it.

    They wanted us to pay them, and get the previous mortgage holder to refund the payment to us. I suggested they go jump in a lake, and get the previous mortgage holder to send the funds to them.

    We are going to be selling our condo here soon, and we’re firing GMAC. We got qualified for a loan with our Credit Union, and we couldn’t be happier.

    GMAC can die in a fire.

  23. kujospam says:

    Sounds like they need to update debt collection laws on this kind of stuff. Personally I think the bank should of been sued for like a 100 if it was worth it in the courts. Creating panic in other people’s lives, and wasting their time should cost them money.