If you’re one of 250 Maryland homeowners with a foreclosure order signed by Ally Bank’s Jeffrey Stephan, you’ve just been granted a reprieve. The bank is withdrawing all Maryland foreclosures authorized by Stephan, who admitted that he casually signed off on thousands of foreclosures each month. But homeowners aren’t completely off the hook. Ally plans to restart the foreclosure process with new filings.

Ally, formerly GMAC, doesn’t plan on extending the action beyond Maryland, though consumer advocates believe the company may eventually have no choice.

What they’re doing is triage,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “They’re thinking: We’ve got a problem in Maryland. Let’s get in front of it. But they’re naive if they think that what they’re doing in Maryland is going to shut the door on their troubles elsewhere.”

The move comes after a Baltimore judge dismissed a foreclosure action in which a homeowner accused Ally of committing fraud by authorizing foreclosure orders signed by Stephans, who admitted that he had signed as many as 10,000 foreclosures per month without checking to see if they were accurate.

Ally Financial to withdraw Maryland foreclosures signed by Jeffrey Stephan [Washington Post]

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