GMAC Resumes Foreclosures; White House Warns Banks To Not Be Stupid

One month ago, GMAC/Ally was the first major mortgage lender to freeze foreclosures and foreclosure sales in about half the U.S.. But the day after Bank of America announced it was thawing its foreclosure freeze, GMAC followed suit. Meanwhile, the White House has warned all lenders that it will go after banks who are found to employ any of the tactics that got them into this mess in the first place.

In September, GMAC had put the brakes on foreclosures in 23 states following the revelation that some lenders had put expediency over accuracy and hired so-called “robo-signers,” untrained rubber stampers who pushed foreclosure paperwork through, often without review. The result was improper foreclosures and illegal evictions.

Now that these two banks have returned to foreclosing on properties, the White House said today that all banks need to take greater care in guaranteeing that they follow the law when foreclosing on a property.

“As institutions are determining their next steps in addressing these issues, we remain committed to holding accountable any bank that has violated the law,” White House spokesman Robert Gibbs said in a statement. “In addition to strongly supporting the investigation by the state attorneys general, the administration’s Federal Housing Administration and Financial Fraud Enforcement Task Force have undertaken their own regulatory and enforcement investigation into the foreclosure process.”

White House warns banks over foreclosures [Reuters]


Edit Your Comment

  1. scoobydoo says:

    Oh, I’m sure the banks are REALLY scared of this threat.

    • ajkilroy24 says:

      Well they know that if they screw up again good ol’ Washington will bail them out again!

    • Ouze says:

      no, you don’t understand – at the end of this speech, Gibbs said, in a tiny voice, “We really mean it this time!”

  2. Amaras says:

    The only real way they will start listening is if we start throwing CEO’s in jail for screwing up.

    • VeganPixels says:

      Or just reinstate the job-killing, anti-American, socialism that was Glass-Steagall. Oops, too late.

      • LadySiren is murdering her kids with HFCS and processed cheese says:

        Could we instead put a CEO-killing policy in place of Glass-Steagall? It would likely enjoy broad public support.

  3. FatLynn says:

    Did we ever see stats on the actual number of errors?

    Foreclosures, when done right, are necessary to pop the bubble and get us back to normalcy, painful though it will e.

    • frank64 says:

      There were extremely few actual errors.

      • Loias supports harsher punishments against corporations says:

        [citation needed]

      • erratapage says:

        Most foreclosures are not disputed. It would be impossible to determine how many factual errors there were. I have anecdotal evidence from friends who practice in foreclosure law that a large number of the foreclosures they fight have errors of some kind.

        • FatLynn says:

          Okay, then, material factual errors.

          I have a hard time believing someone would not dispute an incorrect foreclosure. On the other hand, I don’t really care if the paperwork misspells the owner’s middle name.

      • Duke_Newcombe-Making children and adults as fat as pigs says:

        Whether there were “factual errors” is beside the point, really. Again, two words spring readily to mind: Due Process. Two more would be: Due Diligence. The mortgage-holders are responsible to have their papers in order as proof in a court of law. They are also responsible to submit truthful, factual evidence, handled by people who not only claim they have knew about the circumstances of the foreclosure in question, but actually DID know about the circumstances. “Robo-signers” means submitting false evidence and/or perjury. This is not how you do things in a court of law, regardless of whether the foreclosure itself was warranted.

  4. Sheogorath says:

    If you guys don’t shape up, we’ll get really mad! We mean it this time! We’ll send you a really mean letter! We really, really, really mean it!

  5. drburk says:

    That’s the pot calling the kettle black.

  6. Duke_Newcombe-Making children and adults as fat as pigs says:

    Great. The “United Nations”-style threat: “Behave, or…we’ll warn you to behave in a very strongly worded letter next time.”

  7. Bohemian says:

    How about the government put a freeze on foreclosures until things are figured out. I hate to think someone would lose their home when they were not at fault or the bank had no holding on the mortgage. Kinda hard to un-do without major damage to the homeowner.

  8. tehkne says:

    The White House is taking these fraudulent foreclosures seriously. They won’t do anything about it, but they’ll be real serious about doing nothing.

  9. vastrightwing says:

    I’m sure that BoA, GMAC, WellsFargo, Chase, JP organ, et al, took this very seriously and had the entire staff of the bank combing all the documents for errors and omissions. They will now start a continued program of ramping up campaign donations to both parties until this matter is resolved to everyone’s satisfaction.

  10. DirkWander says:

    Here’s a thought. If the bank can’t prove that they own the mortgage to your house in court then frontier law applies. Sqatters’ right. If you’re using the land then you own the land.

  11. DirkWander says:

    Here’s a thought. If the bank can’t prove that they own the mortgage to your house in court then frontier law applies. Sqatters’ right. If you’re using the land then you own the land.

  12. jdmba says:

    This is more of the same from this administration. Take a corporation to task for exercising its rights. THESE PEOPLE DIDN’T PAY THEIR MORTGAGES … the companies are supposed to say “oh, gee, that’s ok … we were just kidding anyway when we made you sign all those papers and gave you hundreds of thousands of dollars.” 2 more years of this?

    • CoachTabe says:

      Except, ya know, all those times where the banks foreclosed on the wrong house, or someone who had a mortgage with a different bank, or DIDN’T HAVE A MORTGAGE AT ALL.

    • Duke_Newcombe-Making children and adults as fat as pigs says:

      No. A thousand times, no. No one said that the banks cannot exercise their rights per the contract to foreclose. Only that, when utilizing the courts to enforce that remedy, they actually exercise due diligence and not submit false documents and perjuring affidavits. Is this really too much to ask of the beloved banks? Really?

  13. vitajex says:

    Why do VERY few articles about GMAC mention the fact the the majority shareholder is the US Treasury? Essentially, the government is the one foreclosing on these people.

  14. JonBoy470 says:

    I’ve said it before… A mortgage involves hundreds of thousands of dollars. There’s a paper trail associated with it. Asking the lender to maintain the integrity of that paper trail *IS NOT ASKING TOO MUCH* If that $400K is not important enough to BofA, or Ally or whoever for them to hold onto a file folder’s worth of papers in a warehouse, then they shouldn’t be allowed to recover it by foreclosing on the homeowner.

    • SonicPhoenix says:

      I agree. Particularly when the closing costs on said loans cost between $2-5k. If I’m paying the bank a fee of several thousand dollars to process the loan, they should do so properly.

  15. smartmuffin says:

    Robert Gibbs telling people not to be stupid? So basically, do as I say, not as I do?

  16. Galium says:

    “White House warns banks not to be stupid” Thats like closing the barn door after the cows got out.