Ally Financial's GMAC Mortgage Stops 3rd Party Lending After Being Sued for not Following the Law When Foreclosing on Homeowners

Ally Financial's GMAC Mortgage Stops 3rd Party Lending After Being Sued for not Following the Law When Foreclosing on Homeowners


In a move that the Massachusetts attorney general Martha Coakley says indicates that the lender has a problem, knows it and doesn’t want to be held accountable for it, Ally Financial’s GMAC Mortgage will stop doing business with third-party lenders in the State of Massachusetts. Ally Financial says lending in the state “no longer…viable,” but Coakley says that the lender is hightailing it out of Massachusetts because “GMAC has to follow the law before foreclosing on homeowners” and “has problem following those laws and being held accountable for doing so.” 


The announcement came the day after Coakley filed suit against GMAC, Bank of America, Wells Fargo, JPMorgan Chase and Merscorp Inc. (the parent company of the much-maligned Mortgage Electronic Registration System (MERS)) for fraudulent foreclosure practices and failure to deliver on promises to homeowners.


Not surprisingly, Ally Financial disputes Coakley’s claims and insists that Ally Financial's GMAC is in full compliance with all laws in the state. “We are confident in our ability to prevail [before the court],” said an Ally spokeswoman, adding that it is Ally Financial's responsibility to “manage risks and deploy capital in an appropriate manner and in a way that protects the investment of the U.S. taxpayer.” Nearly three-quarters of Ally Financial's GMAC is government-owned in the wake of financial crisis bailouts.


Do you think the Attorney General of Massachusetts should be taking aggressive action against lenders who do not follow the law when foreclosing?


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Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

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