Ally Financial denies foreclosure moratorium
Ally Financial, formerly GMAC Mortgage, said previous reports of a foreclosure moratorium in 23 states are not true, and it is instead addressing an issue raised with the execution of one or more judicially required forms. "In fact, all new residential foreclosures are continuing in the ordinary course of business with no interruption to our usual practice," James Olecki, a spokesman for Ally Financial, told HousingWire. Instead, the company is directing its outsourced vendors to allow time to address a potential issue raised on a number of existing foreclosures. GMAC Mortgage asked its brokers to suspend evictions and REO closings on foreclosures that could have been impacted by the internal procedure issue. "We are also reviewing certain previously completed foreclosures where the same procedure may have been used," Olecki said. All but only one of the states in the original GMAC memo were considered "judicial foreclosure" states by analysts at Barclays Capital. The exception being North Carolina. BarCap didn't think the announcement is a prelude to a multi-state class action lawsuit similar to the one filed against Countrywide, considering heavy foreclosure states such as California, Nevada and Michigan were not on the list. Olecki could not comment on the merits of the challenges lobbed toward its foreclosure procedures because some of them are in litigation, though he did say there was no link between this announcement and the case with American Residential Equities, which alleged GMAC mismanged REO that ARE owns. "These delays are expected to be resolved within the next few weeks and certainly before year end, without serious consequence," Olecki said. "GMAC Mortgage has been addressing the procedural challenge for more than three months. In all other respects, the mortgage business is operating as usual." Write to Jon Prior.