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GMAC: Foreclosures Not Suspended

Foreclosure

GMAC Mortgage LLC says it has not instituted a foreclosure moratorium in 23 states, as has been reported. But the company is addressing an internal issue on some of its loans.

Bloomberg reported today that the Ally Financial Inc. subsidiary told real estate brokers and agents in a Sept. 17 memo to halt foreclosures in 23 states. The report indicated that GMAC would also suspend sales of properties that have already been foreclosed on.

But GMAC spokesman James Olecki said that the company has not instituted a moratorium on all residential foreclosures in 23 states.

“This is not true,” Olecki said in a statement. “In fact, all new residential foreclosures are continuing in the ordinary course of business with no interruption in our usual practice.”

He said the speculation was likely the result of direction it gave to some of its outsource vendors. GMAC was allowing time for the vendors to “address a potential issue that was raised in a number of existing foreclosures challenging the internal procedure we used for executing one or more judicially required forms.”

Olecki explained that the vendors were directed to suspend evictions and REO closings in situations where the foreclosures could have been impacted by the internal procedure. Previously completed foreclosures that might have been impacted from the procedure are also being reviewed.

“We are unable to comment on the specific merits of the challenge because some of them are in litigation,” Olecki stated. “Nevertheless, a new process has already been developed and implemented so that though some existing foreclosures may experience delays while corrective action is taken, there will be no interruption in new foreclosures.”

He projected that the delays will be resolved during the next few weeks “without serious consequence” and said “the mortgage business is operating as usual.”

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