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]