Sen. Al Franken asks regulators to investigate Ally foreclosures
In a letter sent last week to several federal regulatory bodies, Sen. Al Franken (D-Minn.) seeks a full investigation into the "routine filing of false affidavits in foreclosure proceedings" regarding Ally Financial, formerly GMAC Mortgage. Last week, Ally suspended evictions on foreclosure cases where faulty foreclosure affidavits were detected. The suspensions came across 23 states, including New York, Illinois and Florida. The event has even led to a new term entering the common lexicon. Margery Golant, of Golant & Golant, a foreclosure law firm in Boca Raton, Fla., said in an interview with HousingWire, that individuals who sign massive amounts of documents without proper review are called "Robo signers." "Each of your agencies has an important role to play in addressing this egregious situation and holding all appropriate actors fully accountable," said the letter addressed to Timothy Geithner of the U.S. Treasury, Shaun Donovan of Housing and Urban Development and U.S. Attorney General Eric Holder. Ben Bernanke, the chairman of the Federal Reserve, John Walsh at the Office of the Comptroller of the Currency and Sheila Bair, chairman of the Federal Deposit Insurance Corp. are also addressed in the letter. Any "illegitimate" foreclosure must be rescinded, the letter states, and compensation should be awarded to any aggrieved homeowner, Franken suggests. The senator also states concerns that homeowners involved in federal housing aid programs such as the Home Affordable Modification Program, or HAMP, may be affected by Ally's activities and calls for stronger oversight of mortgage servicers to avoid "mistreatment." Ally Financial, the nation's fourth-largest mortgage servicer, halted evictions in 23 states this week after it was revealed that a document processor signed off on thousands upon thousands of foreclosure documents every week without verifying any of the information in the paperwork. Fitch Ratings and Moody's Investors Service will now review Ally Financial for possible downgrades of servicer quality ratings, as a result. According to Franken's Washington office, the Senator supports of an Office of the Homeowner Advocate within the Treasury Department in order to enforce the above call to action. Write to Jacob Gaffney.