Ally Financial, a bank formerly known as GMAC, is likely to declare bankruptcy for its mortgage unit, ResCap, in the next three weeks, the New York Post reported. Ally CEO Michael Carpenter has worked to avoid bankruptcy, but sources told the Post that there are no further options. [more]
Posts Tagged ‘ally financial’
The price lenders must pay to move past the federal investigation into their foreclosure practices went up by $5 billion, the Wall Street Journal reported. And it could rise higher.
The ongoing negotiations between government officials and banks, which appeared close to being finalized in September at a cost of $20 billion to the nation’s five largest mortgage servicers, have centered on a new number: $25 billion. The final cost could eventually reach $29 billion.
The lenders in question are Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo… [more]
America’s largest mortgage providers are nearing a deal with the Department of Justice and 50 state attorneys general to work out some “thorny” foreclosure issues, including robo-singing, the New York Post reported. A proposed settlement, scheduled to be announced in the next few weeks, could range as high as $60 billion and include provisions for principal reduction.
The agreement would form national and state funds for each of the states and settle most civil foreclosure claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
Sources close to the action are wary of talks falling apart at the last moment as the state and bank representatives iron out small details, the Post said. … [more]
A $325 million payment from Ally Financial to Freddie Mac has come to light in an exhibit deep within an amended offering document by Ally as part of a planned share sale to the public, according to the Wall Street Journal. Prior to the revelation, neither Ally, General Motors’ former financing arm which is now primarily government-owned, nor Freddie had disclosed the settlement amount, which had only been documented by the companies in their quarterly securities filings.
Like another settlement between the two firms for $462 million last December, this latest does not mark a major setback; the company had already reserved for the potential repurchase expense. However, the lack of detailed disclosure makes it difficult for investors to know how to interpret a deal.
Supreme Court judges in New Jersey have ordered six major lenders to prove that their foreclosure practices are legitimate or else be blocked from proceeding with uncontested cases against homeowners in the state, according to the Wall Street Journal. The banks included in the order — Ally Financial, Bank of America, Citibank, JPMorgan Chase, OneWest Bank FSB and Wells Fargo — accounted for almost half of all foreclosure filings in the state this year. … [more]
JPMorgan Chase, the third-largest home loan servicer in the United States, has frozen 56,000 open foreclosure cases as it examines whether defective documents may have been filed in court, according to the Palm Beach Post. The move, which has little precedent, comes after news that Ally Financial, a global financial services company, had frozen part of its operations when it was revealed that an employee approved affidavits claiming personal knowledge of foreclosure cases when he did not know anything about them. JPMorgan is carrying $1.35 trillion in mortgage nationwide. “As a result, we have begun to systematically re-examine documents we have filed in current foreclosure proceedings to verify that the affidavits and other documents meet the standard of personal knowledge or review where that is required,” said Tom Kelly, a JPMorgan spokesperson. [Palm Beach Post]
New York-based JPMorgan Chase may face litigation next month that could cast
doubt on thousands of foreclosures after mortgage executive Beth Ann Cottrell said
she didn’t verify documents which were used to justify home seizures, Bloomberg News reported. Citing a May 17 deposition in which Cottrell said she signed
thousands of affidavits and documents supporting the bank’s claims without
personally checking loan records, lawyers for a Palm Beach County, Fla. homeowner
have asked a judge to throw out a foreclosure as a penalty for misleading the
court, according to attorney Tom Ice of Ice Legal PA. The court is scheduled to
hear arguments Oct. 19. Cottrell, a Chase Home Finance operation supervisor, said
she was among eight managers who signed about 18,000 documents a month prepared
by others at the firm, according to a transcript of her deposition provided by
Ice. Now, borrowers who have lost their homes may have a legal basis to
challenge the seizures, based on any inaccurate statements by banks in
foreclosure documents. In 2006, a Florida
court sanctioned Ally Financial’s GMAC Mortgage unit for faulty affidavits, and
this month, the firm suspended evictions in 23 states this month after finding
employees still signing affidavits without checking the data. [Bloomberg]