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California orders Ally Financial to stop foreclosures in state

California attorney general Edmund G. Brown Jr. demanded that Ally Financial stop foreclosures in the state if it could not "immediately prove" its compliance with the law.

The order comes four days after Ally said it had found a "technical" problem with documents it submitted in support of them. An employee of Ally's GMAC mortgage unit, Jeffrey Stephan, admitted in sworn depositions that he signed off on 10,000 documents a month without reading them.

"I'm taking this action to protect California homeowners facing the tragedy of foreclosure," Brown said in a statement. "They are clearly in jeopardy since an Ally Financial official admitted his review of thousands of critical foreclosure documents was really a sham."

State attorneys in Illinois, Iowa and Texas have also announced they are investigating the matter.

Ally -- in which the U.S. Treasury holds a 56 percent stake after a $17 billion federal bailout -- said on Monday that it had initiated a temporary moratorium on evictions and sales of repossessed homes in 23 states while it reviewed individual cases. The 23 states on the company's list are those that require a court order for foreclosures.

States that do not have that requirement -- including California, Maryland and Virginia, as well as the District -- were not on that list. The Washington Post reported Friday that Stephan had also signed off on documents in the other 27 states and that in at least some cases those documents appeared faulty.

California is home to among the regions hit hardest by foreclosures. Brown's cease-and-desist order is likely to have a negative impact on the company's bottom line because in the first half of 2010, California mortgages accounted for nearly a quarter of the $26 billion in home loans that Ally originated.

By Ariana Eunjung Cha  | September 25, 2010; 12:32 PM ET
 
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Comments

wonderful news that alert state attorneys general are facing down the bankster foreclosure mills, most of which are getting rich on tax dollars funneled to them (unaudited) by Fannie & Freddie.
the egregious and blatant fraud associated with every single step pf the HAMP and HARP programs, which have been miserable failures, have cost grief among millions of homeowners. Less than 2% of the money set aside to help homeowners has been spent, while the banks have had nearly two years to gleefully seize and flip millions of homes.
in many cases the banks are made whole on the mortgage by PMI or other insurance instrument AND get the house to flip. It is a two-fer, astounding. even a drug dealer gives you something in return for your money.
emboldened by dozing Treasury officials, many banks reach for a three-fer - they want the mortgage insurance payday, the house to resell and they sue the disenfranchised family for the trumped-up late fees, penalties, interest and 'legal' fees.
the family is out, the banks get paid three ways and the taxpayers' funds have sat idle at Treasury, undistributed.
THEN the banks trash the homeowners as reckless, greedy and even immoral.
It is enough to make this patriotic woman an extreme cynic.
BTW, what happens to the undistributed 98% of the housing aid money? where does that go? more for banks?

Posted by: FloridaChick | September 25, 2010 3:30 PM | Report abuse

The jig is up and notice none of the Law Makers are saying a thing or helping the people of their State. Obama has been trying to get help for the homeowners while the election officials are protecting the Banks interest. It's called fraud and everyone knows it but with Law Makers fighting tooth and nail to save Banks while leaving citizens to ask Obama for help. Let's see if these people vote for the GOP on election day.

Posted by: Anonymous | September 25, 2010 11:49 PM | Report abuse

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Posted by: bradpitt26 | September 26, 2010 1:10 AM | Report abuse


You guys should stop complaining because, one the health care we have now isnt as good as it was supposed to be. also the law has just been signed so give it some time. so if u want to say u have the right to choose tell that to ur congress men or state official. If you do not have insurance and need one You can find full medical coverage at the lowest price by calling 877-882-4740 or check http://bit.ly/9fDY7U If you have health insurance and do not care about cost just be happy about it and trust me you are not going to loose anything!

Posted by: schoonmaker25 | September 26, 2010 1:26 AM | Report abuse

Once again, American homeowners have experienced the croc of dung dumped upon us. We've paid for the largest theft in history with the loss of our equity, we've argued with the incompetence of banks thru the SCAM of HAMP (written by Geithner to assist banks, not homeowners)--now we see that the Bastards have been using illegal paperwork to top it all off, and foreclose on properties at the rate of 2500 per day!
This happened once before--in NAZI Germay!
What a Disgrace!
Madashellincarsoncity

Posted by: Anonymous | September 26, 2010 10:33 AM | Report abuse

Wow

Posted by: Anonymous | September 26, 2010 10:41 AM | Report abuse

Those loans are sold to Ally Bank not Ally Financial. That's where they should be looking.

Posted by: Anonymous | September 26, 2010 10:42 AM | Report abuse

Just visit you tube and type in
Chase collaboration with the nazis

Posted by: Anonymous | September 28, 2010 2:30 AM | Report abuse

GMAC is halting all foreclosures? We hired the law office of adorno & damas in miami florida to collect for violation of florida's fair debt collection act. Not sure if anyone has had success.

Posted by: ASKJMAN | October 4, 2010 5:12 PM | Report abuse

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