Ally Financial, the lender that stopped evictions in 23 states amid concern that its foreclosure process may be illegal, has been asked by Colorado’s attorney general to extend the freeze by its GMAC Mortgage unit to his state.
In a letter dated Monday, Attorney General John Suthers said he wanted to hear what new procedures GMAC has put in place to “ensure that fair and accurate representations are made when it pursues foreclosure actions.” He asked for a meeting between GMAC and his consumer-protection staff.
GMAC Mortgage notified agents and brokers Sept. 17 that it had suspended evictions in 23 states. Last week, Ally, the Detroit-based auto and home lender, said it found a “technical” deficiency in its foreclosure process allowing employees to sign documents without a notary present or with information they didn’t personally know was true. Colorado wasn’t one of the 23 states.
Attorneys general in at least five states, including Texas and Florida, are investigating GMAC Mortgage practices.
GMAC has initiated more than 1,000 foreclosure actions in Colorado since Jan. 1, Suthers said in his letter. In most, if not all, of these foreclosures, “local attorneys for GMAC represent in various required documents that GMAC Mortgage LLC is the ‘holder of the evidence of debt’ under Colorado law,” he said.
“While these are not sworn affidavits of the kind at issue in other states, the accuracy of these documents is essential for preserving the integrity of the foreclosure process in Colorado,” Suthers said.
