GMAC Mortgage Denies American Residential Equities Lawsuit Allegations
GMAC Mortgage (GMAC) said Friday that it will vigorously defend itself against allegations of wrongdoing in a lawsuit filed by American Residential Equities and claimed the suit was without merit. American Residential Equities (ARE), a Miami real estate company, recently sued GMAC Mortgage, claiming it failed to properly service mortgages and REO properties ARE owns. “We believe this suit is without merit and will vigorously defend against the allegations, including the pursuit of all outstanding claims against American Residential Equities,” said James Olecki, a spokesman for GMAC Mortgage, told REO Insider in a written statement. Olecki said GMAC Mortgage is committed to work with borrowers to modify loans within its contractual obligations. Since 2008, he said, GMAC Mortgage has conducted more than 200,000 permanent loan modifications. “GMAC Mortgage continues to expend every available effort in assisting at-risk homeowners with permanent payment relief and avoiding foreclosures wherever possible,” Olecki said. ARE buys and liquidates pools of nonperforming residential mortgages. Upon acquiring loans, ARE typically retains a company to “service” the loans and originally retained GMAC in 2004 for that purpose. ARE alleges in the suit that GMAC failed to comply with the servicing agreement, and also failed to maintain and inspect properties. On April 20, 2009, GMAC sent a letter to ARE to terminate the servicing agreement, without cause, effective no later than July 31, 2009, but less than two weeks later GMAC extended the termination four months, through November 2009, according to the lawsuit. ARE also alleged that GMAC pressed it to offer preferential treatment and a loan modification to the brother of Georgia State Rep. Joe Heckstall. Heckstall has said he’s not ready to comment on the lawsuit. GMAC made no comment about the allegations regarding Heckstall. Write to Jon Prior. The author holds no relevant investments.