Ohio Attorney General Richard Cordray has sued GMAC Mortgage LLC and its parent company, Ally Financial Inc., claiming the servicer and its employees committed fraud against Ohio consumers and courts by signing and filing false affidavits in foreclosure cases.
Through the lawsuit, filed in Lucas County Common Pleas Court, Cordray is asking the court to grant a preliminary and permanent injunction preventing GMAC/Ally from proceeding to foreclose in any pending Ohio case or allowing the property to be sold. Cordray is also asking for civil penalties of up to $25,000 for every violation of Ohio's Consumer Sales Practices Act and for consumer restitution.
‘Instead of stepping up and assisting those at risk of losing their homes, it is clear that GMAC chose to compound the problem through fraudulent and unfair and deceptive practices,’ Cordray says.
GMAC denies that there was anything fraudulent or deceitful about its practices.
‘If procedural mistakes were made in the completion of certain legal documents, GMAC Mortgage reacted proactively to the issue and immediately undertook steps to remedy the situation,’ a company statement says.
GMAC says its internal reviews have not turned up any inappropriate foreclosures resulting from the affidavit flaws.
‘Typically, a foreclosure is not filed until the borrowers are six to 12 months delinquent and all other alternatives to foreclosure have been pursued, such as loan modifications, repayment plans, short sales or deeds-in-lieu,’ GMAC says. ‘The fact of default and the right to foreclose are not in dispute.’
Cordray has additionally requested that JPMorgan Chase and Bank of America suspend moving toward a judgment, sale, eviction or property transfer involving any foreclosure case with affidavits signed by those employees.
Cordray also sent letters to Wells Fargo and Citibank requesting that the banks meet with his office to discuss foreclosure affidavit procedures.