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GMAC Mortgage, a defunct unit of Ally Financial, will pay $230 million to borrowers as part of a government review of potentially flawed foreclosures, AFP reports citing the Federal Reserve. "More than 232,000 borrowers whose homes were in any stage of foreclosure in 2009 and 2010 with GMAC Mortgage will receive cash compensation," the Fed said in a statement. The move is similar to enforcement actions announced in early 2013 by the Fed and the Office of the Comptroller of the Currency involving 13 mortgage-servicing companies, the Fed said. GMAC Mortgage, like those institutions, was hit with the enforcement action "for deficient practices in mortgage loan servicing and foreclosure processing," the central bank said. The Fed said the bankruptcy court that is overseeing the bankruptcy proceedings involving GMAC Mortgage had approved GMAC Mortgage participation in the cash payments. GMAC filed for Chapter 11 bankruptcy protection last year. The agreement concludes the foreclosure review for GMAC Mortgage borrowers. Including that agreement, the Fed said, about 4.4 million borrowers will receive a total of more than $3.8 billion in cash compensation from the 14 institutions. In addition, $5.8 billion will be provided by the servicers in commitments for loss-mitigation assistance, such as loan modifications and forgiveness of deficiency judgments. Problems with foreclosure-processing came to light in 2010 amid the collapse of the housing bubble blamed largely on risky lending practices. In the so-called "robo-signing" scandal, banks were found to have done shoddy mortgage paperwork, including signing documents without a review of the facts in them. The 13 other institutions involved in the review are Aurora Bank, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign Bank, SunTrust, US Bank and Wells Fargo.
GMAC Mortgage, a defunct unit of Ally Financial, will pay $230 million to borrowers as part of a government review of potentially flawed foreclosures, AFP reports citing the Federal Reserve.
"More than 232,000 borrowers whose homes were in any stage of foreclosure in 2009 and 2010 with GMAC Mortgage will receive cash compensation," the Fed said in a statement.
The move is similar to enforcement actions announced in early 2013 by the Fed and the Office of the Comptroller of the Currency involving 13 mortgage-servicing companies, the Fed said.
GMAC Mortgage, like those institutions, was hit with the enforcement action "for deficient practices in mortgage loan servicing and foreclosure processing," the central bank said.
The Fed said the bankruptcy court that is overseeing the bankruptcy proceedings involving GMAC Mortgage had approved GMAC Mortgage participation in the cash payments. GMAC filed for Chapter 11 bankruptcy protection last year.
The agreement concludes the foreclosure review for GMAC Mortgage borrowers.
Including that agreement, the Fed said, about 4.4 million borrowers will receive a total of more than $3.8 billion in cash compensation from the 14 institutions.
In addition, $5.8 billion will be provided by the servicers in commitments for loss-mitigation assistance, such as loan modifications and forgiveness of deficiency judgments.
Problems with foreclosure-processing came to light in 2010 amid the collapse of the housing bubble blamed largely on risky lending practices.
In the so-called "robo-signing" scandal, banks were found to have done shoddy mortgage paperwork, including signing documents without a review of the facts in them.
The 13 other institutions involved in the review are Aurora Bank, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign Bank, SunTrust, US Bank and Wells Fargo.
