Team Effort: Ohio, Colorado AGs start reviews of GMAC foreclosures
The Ohio Attorney General Richard Cordray and Colorado AG John Suthers joined five other states in a review of the GMAC Mortgage, now Ally Financial, foreclosure issue. Cordray sent a letter to Ohio judges this week requesting state courts make a special review of all foreclosure cases involving GMAC Mortgage, and Suthers sent a letter directly to GMAC, requesting an explanation of what went wrong and any new procedures that have been put in place since. Early last week, GMAC suspended evictions and REO sales in 23 states where faulty foreclosure affidavits were detected. The servicer of nearly $380 billion in mortgages admitted some documents were signed without direct knowledge of them or a notary present. Moody's Investors Service has put the GMAC servicer rating and $7.6 billion worth of residential mortgage-backed securities up for review because of the issue. Suthers wrote in his letter that GMAC initiated more than 1,000 foreclosure actions in Colorado since Jan. 1. "In particular, I would like to learn what steps are taken to insure that GMAC is indeed the holder of the evidence of debt being foreclosed upon, that the loan question in default, that efforts have been undertaken to mitigate the foreclosure through loan modification, forbearance, or other steps, and that outstanding loan balances are as represented," according to Suthers' letter. Write to Jon Prior.