News: NY Banking Dept. Requests Suspension of Foreclosure Actions
The following is from the NY Banking Department’s website:
October 8, 2010
To the Institution Addressed:
Recent events surrounding the foreclosure process of several mortgage loan servicers and the use of individuals identified as “robosigners” to execute affidavits without proper verification have raised considerable concerns for the Banking Department.
As you may be aware, on September 20, 2010, Ally Financial halted foreclosures in several states after discovering that faulty affidavits were filed in foreclosure cases. Specifically, Ally indicated that certain individuals executed affidavits without personal knowledge of the allegations contained therein. Subsequently, JP Morgan Chase and Bank of America made similar announcements concerning documents filed in foreclosure actions.
Given the extent and severity of the issues raised, the Department is requesting that [Institution Addressed] conduct an internal review of its foreclosure practices in New York and provide a response by October 22, 2010 to the following:
- The steps you are taking or have taken to review your foreclosure process in New York;
- The results of your review, including a description of the process for verifying affidavits submitted in support of foreclosure actions in New York and which, if any, of your employees or agents have executed foreclosure documents without direct personal knowledge of the facts or with other irregularities;
- The corrective action, if any, you have taken or intend to take in response to the results of your internal review;
- The measures taken to ensure that affidavits filed in New York foreclosure actions are executed in compliance with New York law; and
- The status of pending foreclosure actions (including foreclosure sales and evictions) in New York and the measures taken to suspend such actions pending your review and corrective action.
In the interim, we are requesting that [Institution Addressed] suspend foreclosure actions in New York until such time as it has conducted a thorough analysis of its foreclosure practices and determined that such practices are in compliance with New York law.
Please visit our Foreclosure category to learn more about foreclosure issues.
News: GMAC Halting Home Foreclosures
While we are not yet sure if GMAC is actually stopping its pending foreclosure actions in NY, although we hope that they are, the following is from a recent Bloomberg.com article entitled “Ally’s GMAC Mortgage Halts Home Foreclosures in 23 States:”
Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York.
GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 and obtained by Bloomberg News. Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to stop evictions, cash-for-key transactions and lockouts, regardless of occupant type, with immediate effect, according to the document, addressed to GMAC preferred agents.
The company will also suspend sales of properties on which it has already foreclosed. The letter tells brokers to notify buyers that the company will extend the closing date on all sales by 30 days. Buyers will be able to cancel their agreement to purchase and get their deposit back, according to the letter….
Following is a table of the affected states.
Connecticut Florida Hawaii Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Nebraska New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Pennsylvania South Carolina South Dakota Vermont WisconsinTo contact the reporter on this story: Denise Pellegrini in New York at dpellegrini@bloomberg.net.
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