Illinois becomes fourth state to suspend Ally Financial foreclosures
The Illinois department of financial regulation on Wednesday called on Ally Financial to stop all foreclosures currently underway and hold off from initiating new ones until the mortgage process can be investigated.
"Home foreclosure is serious business. It is no time to start cutting corners.The department intends to keep a close watch on Ally/GMAC Mortgage to ensure that its processes are fair to homeowners and in compliance with the law," Brent Adams, the state's secretary for financial and professional regulation said in a statement.
The state said more than 100,000 loans in Illinois are serviced by Ally and three quarters of those are primary mortgages.
In the past few days, Colorado, Connecticut and California have also asked the company to halt foreclosures. Five other states have opened civil investigations.
The legitimacy of foreclosures handled by the company came into question after Ally said on Sept. 20 that it had found irregularities in the preparation of documents submitted to courts in support of the actions. An employee of the company's GMAC unit, "robo-signer" Jeffrey Stephan said he signed off on up to 10,000 documents a month without reviewing them thoroughly.
Illinois was already on the list of 23 states in which Ally had halted evictions and resales of homes that were repossessed. The regulator's request broadens the moratorium to foreclosure actions in the early part of the process.
Ariana Eunjung Cha
| September 29, 2010; 6:59 PM ET
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