Ohio sues Ally Financial alleging fraud in foreclosures
Ohio state attorney general Richard Cordray is suing Ally Financial and its GMAC mortgage unit, alleging fraud in foreclosures across the state in what could be the first in a wave of lawsuits against the nation's largest lenders.
Cordray said the alleged fraud was the "tip of an iceberg of industrywide abuse of the foreclosure process" and is asking for civil penalties of up to $25,000 for every violation of consumer laws and for Ally to pay back losses to homeowners.
He has called for courts to freeze Ally foreclosures.
GMAC said in a statement Wednesday that it believes "there was nothing fraudulent or deceitful about its foreclosure practices" and that it "expects to be fully vindicated by the Ohio courts."
"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," the company said. "As previously stated, there have not been any inappropriate foreclosures."
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