Ally Financial CEO to Cop to "Unacceptable" Foreclosure ProcessingNov 18, 2010 | Parker Waichman LLP
The head of Ally Financial Inc. will tell a House Financial Services Committee hearing today that the way foreclosure paperwork was handled by his company was “unacceptable.” According to a Bloomberg report, Thomas Marano, the CEO of Ally Financial, will also admit today that foreclosure affidavits were signed “outside the immediate physical presence of a notary and without direct personal knowledge of the information in the affidavits.”
Officials from the U.S. Treasury Department and the Federal Reserve will also be testifying before the congressional panel today.
Earlier this fall, GMAC Mortgage, a unit of Ally Financial, suspended foreclosure seizures in 23 states and started reviewing its foreclosure procedures in all states after questions were raised about the way it handled foreclosure documents. Soon after, other lenders, including Bank of America and JP Morgan Chase, announced similar moves.
The banks’ actions came after it was learned that some mortgage servicers employed people who could sign foreclosure affidavits so quickly they popularized a new term for them: “robo-signer.” In depositions taken by lawyers for embattled homeowners, some robo-signers said they or their team had signed 10,000 or more foreclosure affidavits a month. Those affidavits say the preparer personally reviewed the files, but in their depositions, the workers acknowledge they had no time to actually do that. In some cases, the affidavits weren’t properly notarized.
The revelations spawned multiple investigations, including one by attorneys general in all 50 states.
In prepared testimony he will deliver today on Capitol Hill, Marano will offer something of a mea culpa, according to Bloomberg.
“Our company’s process for preparing foreclosure affidavits was flawed,” the statement says. “These flaws are entirely unacceptable to me.”
Marano will also try to assure lawmakers that Ally has “resumed foreclosure sales only after an individualized review of each case.”
On another front, the four major US bank regulators are conducting a joint investigation into the foreclosure mess. According to The Washington Post, the Federal Reserve, Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Deposit Insurance Corp. are working together on the probe.
Federal Reserve board member Elizabeth A. Duke is among those scheduled to testify today before the House Financial Services Committee. According to the Post, she will tell the panel that investigators are expected to conclude the on-site portion of their review by the end of the year and publicly release a report highlighting their findings early next year.
John Walsh, acting comptroller of the currency will tell the same committee that the joint investigation will also examine the role of Mortgage Electronic Registration Systems – a tracking system for mortgage assignments created by the financial industry – and Lender Processing Services, a Jacksonville, Fla.-based company that tracks mortgage payments and prepares foreclosure documents for numerous big banks, played in the foreclosure debacle.
If you have believe that you were the victim of a wrongful foreclosure, legal help is available at www.yourlawyer.com.