Colorado, Ohio join states ordering freeze on foreclosures by Ally
Colorado Attorney General John W. Suthers ordered Ally Financial to halt home foreclosures in the state, following similar actions by Connecticut and California.
In a letter to the company dated Monday, Suthers said lawyers for the company's GMAC mortgage unit made claims about unpaid loan balances and ownership of the mortgage that are in question after the company admitted last week that some documents contained "important but technical defect."
"[T]he accuracy of these documents is essential for preserving the integrity of the foreclosure process in Colorado," Suthers wrote.
Ohio on Tuesday said it had asked state courts for a "special review" of all GMAC foreclosure cases. Attorney General Richard Cordray said the action was taken to "protect the integrity of the system."
Ally confirmed early last week that it had halted evictions and sales of repossessed properties in 23 states after learning of the document processing issue. Those 23 states require a court order for foreclosures to proceed. Colorado was not the in the initial list.
Connecticut and California have also asked Ally's GMAC mortgage unit to halt foreclosures, while Texas, North Carolina, Iowa and Illinois are investigating the company's lending practices.
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