Ohio accuses Ally of 'fraudulent' foreclosures

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Ally Financial and its subsidiary GMAC Mortgage are being sued by the Ohio Attorney General for allegedly submitting fraudulent documents in hundreds of foreclosure cases across the state.

The lawsuit, filed Wednesday in Lucas County, comes after Ally halted foreclosures last week in Ohio and the 22 other U.S. states that require judicial approval of the process. The move came after it was revealed that some bank employees had signed foreclosure affidavits without verifying that the documents were accurate, a process now known as "robo-signing."

Attorney General Richard Cordray has requested an injunction that would block Ally from moving forward on any pending foreclosure in Ohio or allowing the home to be sold. He is also asking for civil penalties of up to $25,000 for every violation of Ohio law and for consumer restitution.

"We know that as Ohioans were fighting to save their homes, this loan servicer benefited financially from the dire circumstances," Cordray said in a statement. "Instead of stepping up and assisting those at risk of losing their homes, it is clear that GMAC chose to compound the problem through fraudulent and unfair and deceptive practices."

Ally maintains that its actions were not fraudulent and said it would fight the charges.

"There was nothing fraudulent or deceitful about GMAC Mortgage's practices," James Olecki, a company spokesman told CNNMoney.com. "If procedural mistakes were made in the completion of certain legal documents, GMAC Mortgage reacted proactively to the situation and immediately undertook to remedy the situation."

He said foreclosures are typically not filed until the customers are six to 12 months delinquent, "so the fact of default and the right to foreclose are not in dispute."

Cordray also called on JPMorgan (JPM, Fortune 500) and Bank of America (BAC, Fortune 500) to suspend foreclosures that may have involved robo-signed documents. He also sent letters to Wells Fargo (WFC, Fortune 500) and Citibank (C, Fortune 500), asking them to meet with his office to discuss foreclosure affidavit procedures.

However, JPMorgan and Bank of America both announced plans to halt foreclosures in the so-called judicial states, pending an internal review of the banks' processes. To top of page


Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.24%4.20%
15 yr fixed3.30%3.18%
5/1 ARM3.42%3.36%
30 yr refi4.22%4.16%
15 yr refi3.29%3.17%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
  • Find Homes for sale
    Real estate and homes for sale on Trulia

  • Property Type
  • Find a home in: New York | Atlanta | Chicago | Los Angeles
  • Washington D.C | Houston | Philadelphia | More options
Index Last Change % Change
Dow 17,031.14 43.63 0.26%
Nasdaq 4,518.90 -48.70 -1.07%
S&P 500 1,984.13 -1.41 -0.07%
Treasuries 2.59 -0.02 -0.88%
Data as of 12:57am ET
Company Price Change % Change
Bank of America Corp... 16.74 -0.05 -0.30%
Yahoo! Inc 42.55 1.29 3.13%
Apple Inc 101.63 0.20 0.20%
Facebook Inc 74.58 -3.34 -4.29%
Microsoft Corp 46.24 -0.46 -0.97%
Data as of Sep 15

Sections

The Radisson hotel chain has suspended its sponsorship of the Minnesota Vikings in the wake of child abuse allegations against Adrian Peterson. More

First official government report shows big decrease in uninsured after Obamacare kicks in and more Americans gain health insurance. More

AT&T has developed a software platform that can transcribe and offer near-real-time analysis on customer service calls. More

Atlanta has the country's highest level of income inequality, but civic entrepreneurs can close the gap. Here's how. More

What do all 401K millionaires have in common? Christine Romans explains what it takes to be a member of the club. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.