GMAC, which is owned by Ally, which is owned by the U.S. government, announced today that it is hiring legal and accounting firms to review its foreclosure procedures. Why would GMAC be doing this?
“GMAC Mortgage is committed to preserving the integrity of the foreclosure process,” the company said in its announcement. Also:
[F]oreclosure sale files nationwide receive an additional review by a specialized team to ensure that: home preservation procedures have been fully followed; the timing and substance of the foreclosure is appropriate; and the file itself is in good order and complies with all laws and requirements of the state of jurisdiction.
Last month, GMAC become one of the first mortgage firms to suspend foreclosure activities because it wasn’t totally sure that it had properly filled out the paperwork that’s required to kick people out of their houses. Since then, Bank of America, JPMorgan Chase, PNC and Goldman Sachs have each called halts to at least part of their U.S. foreclosure activities, and Citigroup has stopped doing business with one of the law firms that helped it process mortgage filings.
GMAC might have another good reason for initiating an independent audit of its paperwork. New York Attorney General and gubernatorial candidate Andrew Cuomo ramped up his investigations today into improper foreclosures. Other powerful people are of a similar mind to Cuomo. The White House today endorsed state investigations into foreclosures, and Cuomo’s counterparts in 39 other states are expected to announce a full-bore investigation tomorrow, according to The Wall Street Journal. If GMAC hadn’t decided to spearhead its own independent audit, it’s likely that the U.S. government would have been happy to do the digging for them.