Shadowproof

Ally Financial Says “All Good” on Robo-Signing

Earlier today, Al Franken said he inquired to Ally Financial about their robo-signing difficulties and got a form letter for his trouble. “It’s nice to see,” Franken quipped, “that Ally doesn’t treat homeowners any worse than they treat a Senator.”

Franken could just read the paper today and find out that Ally went and fixed the problem. All gone!

Ally Financial, one of the firms at the center of the foreclosure debacle that unfolded last year, is reporting that it has made significant progress in correcting improperly filed foreclosure papers.

In a press release touting its 2010 earnings report, the lender said that of the approximately 25,000 affadavits that may have been problematic, “all but 2,548 have been remediated or, where necessary, re-executed.” In other words, about 90 percent of the cases have been resolved.

It’s extremely important for Ally, the parent company of GMAC, to give the impression that the foreclosure fraud crisis is over. They want to go public this year, and obviously stability is crucial to both finding potential shareholders and an underwriter for the IPO deal. This is why Ally, unlike other big banks, reached a settlement with Fannie Mae on repurchases, for the relatively cheap price of $462 million (that’s for loans serviced by GMAC Mortgage on Fannie Mae’s behalf; there could be other MBS at play), around one-half of 1% of total unpaid principal balance on those loans.

As for the foreclosure cases, Ally’s party line throughout has been “nothing to see here.” But they admit that 10% of their foreclosure cases are currently in limbo. They specifically cite “2,540 cases in three states where further guidance from the states on remediation efforts is required.” I’m thinking one of them is New Jersey, where the biggest banks await a hearing, which was postponed again, to prove to the state courts why they should be allowed to continue foreclosures. The banks are desperately trying to come to a settlement in that case, with a deadline of March 1. As far as I know, GMAC is still being sued by the state of Ohio over robo-signing, so that could be the second state. Which one is the third?

My take is that Ally can claim whatever they want, but the facts show that the court cases have not stopped. Sadly, many judges still will accept whatever dreck the banks put in front of their face as giving them the legal right to foreclose. But the core group of people engaged on the side of truth and the rule of law are not bound to stop, and they have some allies for such principles in the judiciary.

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