Consumer Law

Connecticut and California AGs Freeze Ally Financial's "Defective" Mortgage Foreclosure Program

By Brian Wolfman

Last week, CL&P blogger Alan White explained that Ally Financial was halting some of its foreclosure business in 23 states because of unspecified "defects" in its program.  Now, we learn in this article in today's Washington Post that the Connecticut and California AGs have frozen Ally's foreclosure activities. The article explains that other AG's are also investigating. Here's an excerpt:

Attorneys general in Connecticut and California ordered Ally Financial's GMAC mortgage unit to freeze all foreclosures within their borders, joining a growing list of states investigating whether the firm and other lenders improperly kicked people out of their homes.Connecticut Attorney General Richard Blumenthal on Monday accused Ally of using "defective foreclosure documents" in its filings and said he ordered the moratorium "to forestall horrendous, illegal harm against homeowners." California Attorney General Edmund G. Brown Jr. on Friday called Ally's document review process a "sham. "In Illinois, Attorney General Lisa Madigan said she "wants to see Ally stop the filing of foreclosures in Illinois as well until this situation can be remedied," a spokeswoman said. Iowa, North Carolina and Texas have also opened criminal and civil investigations into Ally's lending practices as well as those at other large mortgage companies, officials said.

Full post as published by CL&P Blog on September 28, 2010 (boomark / email).