Ally Financial defends itself in GMAC Mortgage dealings

Ally Financial, whose GMAC Mortgage unit halted evictions in 23 states amid allegations of mishandled affidavits, says its filings contained no false claims about home loans.

The "defect" in affidavits used to support evictions was "technical" and was discovered by the company, Ally spokeswoman Gina Proia said in an e-mailed statement.

Employees submitted affidavits containing information they didn't personally know was true and sometimes signed without a notary present, according to the statement.

Most cases will be resolved in the next few weeks, and those that can't be fixed will "require court intervention," Proia said.

"The entire situation is unfortunate and regrettable and GMAC Mortgage is diligently working to resolve the situation," she said. "There was never any intent on the part of GMAC Mortgage to bypass court rules or procedures. Nor do these failures reflect any disrespect for our courts or the judicial processes."

State officials are investigating allegations of fraudulent foreclosures at the nation's largest home lenders and loan servicers.

Lawyers defending mortgage borrowers have accused GMAC and other lenders of foreclosing on homeowners without verifying they own the loans. In foreclosure cases, companies commonly file affidavits to start court proceedings.

"All the banks are the same; GMAC is the only one who's gotten caught," said attorney Patricia Parker. "This could be huge."

Aside from signing the affidavits without knowledge or a notary, "the sum and substance of the affidavits and all content were factually accurate," Proia wrote. "Our internal review has revealed no evidence of any factual misstatements or inaccuracies concerning the details typically contained in these affidavits such as the loan balance, its delinquency, and the accuracy of the note and mortgage on the underlying transaction."

Affidavits are statements written and sworn to in the presence of someone authorized to administer an oath, such as a notary public.

GMAC told brokers and agents to halt evictions tied to foreclosures on homeowners in 23 states including Florida, Connecticut and New York. It said it may have to take "corrective action" on other foreclosures, according to a Sept. 17 memo.

Foreclosures won't be suspended and will continue with "no interruption," Proia said in a statement yesterday.

In December, a GMAC Mortgage employee said in a deposition that his team of 13 people signed "a round number of 10,000" affidavits and other foreclosure documents a month without verifying their accuracy.

The employee said he relied on law firms sending him the affidavits to verify their accuracy instead of checking them with GMAC's records as required. The affidavits were then used to complete the process of repossessing homes and evicting residents.

Florida Attorney General William McCollum is investigating three law firms that represent loan servicers in foreclosures and are alleged to have submitted fraudulent documents to the courts, according to an Aug. 10 statement.

The firms handled about 80 percent of foreclosure cases in the state, according to a letter from Rep. Alan Grayson, D-Fla.

"It appears the actions we have taken and the attention we've paid to this issue could have had some impact on the actions that GMAC took today, but we can't take full credit," said Ryan Wiggins, a McCollum spokeswoman.

In August, Florida Circuit Court Judge Jean Johnson blocked a Jacksonville foreclosure brought by Washington Mutual and JPMorgan Chase Bank, which had purchased the failed bank's assets, and Shapiro & Fishman, the companies' law firm. Documents eventually showed that the mortgage on the house was in fact owned by Fannie Mae.