Ohio AG Suing GMAC on Foreclosure Mess

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In the latest on the foreclosure front, Ohio Attorney General Richard Cordray announced today a suit against GMAC Mortgage, the loan servicing subsidiary of the bank Ally Financial, for “fraudulent practices potentially involving hundreds of Ohio mortgage loan foreclosures.” Here’s the press release from the Ohio AG’s office:

Last week, Cordray sent a letter to Ohio judges requesting that the state courts make special review of all foreclosure cases that involve GMAC Mortgage. The letter was sent in response to recent reports of questionable affidavit procedures by the large loan servicer. It appears that affidavits were being signed en masse, and that those signing them were attesting to having personal knowledge about matters that they in fact knew little or nothing about.

Cordray’s announcement is the latest in a flurry of actions against GMAC and other major mortgage companies throughout the country, all stemming from servicers’ use of bogus legal filings to foreclose on homeowners. (A fuller description of that mess is here.) More than half a dozen state attorneys general are investigating major financial players like GMAC, Bank of America, and JPMorgan Chase. Some banks have ordered moratoriums on foreclosures in their states until the paperwork debacle is settled, while AGs and members of Congress have demanded more foreclosure freezes. Read more on that here.

In his official announcement, Ohio’s Cordray said, “We know that as Ohioans were fighting to save their homes, this loan servicer benefited financially from the dire circumstances. Instead of stepping up and assisting those at risk of losing their homes, it is clear that GMAC chose to compound the problem through fraudulent and unfair and deceptive practices.”

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