GMAC Calls News of Its Foreclosure Moratorium Untrue Speculation
By: Carrie Bay
It was reported by Bloomberg Monday that GMAC Mortgage, a unit of what was formerly GMAC Financial and has now been rebranded Ally Financial Inc., had ordered its brokers and agents to halt foreclosures in
certain states. The news was widely picked up and regurgitated by a host of mainstream media outlets and mortgage- and default-related trade publications.
The company said in a press statement, “Recent reports have stated that GMAC Mortgage instituted a moratorium on all residential foreclosures in 23 states. This is not true. In fact, all new residential foreclosures are continuing in the ordinary course of business with no interruption in our usual practice.”
Bloomberg cited a two-page GMAC memo addressed to “GMAC preferred agents” that said the company may “need to take corrective action in connection with some
foreclosures” in the affected states and instructed them to halt evictions, cash-for-key transactions, and lockouts, regardless of occupant type, and even suspend sales of REO properties.
Minneapolis-based GMAC Mortgage says the “speculation” likely emanates from a direction previously given by the company to certain of its outsource vendors to allow time to address a potential issue that was raised in a number of existing foreclosures due to an internal procedure GMAC used for executing one or more judicially required forms.
GMAC explained that the direction was to suspend evictions and REO closings where the related foreclosure could have been impacted by the internal procedure, and said it is reviewing some previously completed foreclosures where the same procedure may have been used.
The company says it is unable to comment on the specifics of the procedural challenge because some of the cases are currently in litigation.
“A new process has already been developed and implemented so that though some existing foreclosures may experience delays while corrective action is taken, there will be no interruption in new foreclosures,” GMAC said.
“These delays are expected to be resolved within the next few weeks and certainly before year end, without serious consequence. GMAC Mortgage has been addressing the procedural challenge for more than three months. In all other respects, the mortgage business is operating as usual,” according to the company’s statement.
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