GMAC/Ally to Homeowners: Heads I Win, Tails You Lose

This blog post on Family and Consumer Law addresses some of the homeowner questions that I’m getting on their GMAC/Ally serviced mortgages post-GMAC-bankruptcy.  I don’t know the answers yet.  My office already  noticed that shortly after filing bankruptcy, GMAC sent out mass mailings to homeowners that they should just carry on with paying the bankrupt Ally.  Meanwhile, it moved for relief from the automatic stay for the limited purpose of servicing and foreclosing some loans.  But also, they are telling homeowners with claims against Ally to basically “get in line” and file a proof of claim in the bankruptcy.  Even if you prevailed and had a judgment against Ally/GMAC, get in line with the 800,000 other unsecured creditors.  This is from the Family and Consumer Law Blog:

So asking for a loan modification might make you pay Ally bank’s lawyer’s fees?

 What happened to getting to talk to an actual person?  Was that real pony just a big tease?
Ally Bank, as you probably don’t know, had about 33 of its subsidiaries file for chapter 11 bankruptcy protection recently. (It was just one subsidiary with a variety of operating names, I believe).  The filing did not make big news outside of the bankruptcy and foreclosure circles, even though it should have, because it was a filing for chapter 11 by one of the big five banks that signed the almost-certain-to-fail National Mortgage Settlement (which lasts 3 years and hasn’t been converted into legislation and which doesn’t, at present, have anyone to implement it), and also because some people are saying that Ally is using the filing not only to get out of the National Mortgage Fake Settlement, but to avoid having to modify loans:The New York Post has a story from May 21 about a family that had their deal put on hold by the filing, and it includes these chilling words:

The giant servicer will continue operating while selling assets. But GMAC has sent out notices to attorneys regarding non-foreclosure litigation, indicating it’s taking advantage of the automatic freeze bankruptcy puts on such cases. That will further burden New York’s overstressed court system, as consumers from across the nation seek hearings in the Southern District, where the case was filed. 

“GMAC is using bankruptcy to maximize its position in litigation,” said Tirelli. “It will proceed in foreclosures, but for any borrower with a claim against GMAC, they are saying, Sorry, go to NY and file a motion.’” 

In addition, homeowners negotiating a foreclosure settlement deal or loan modification will likely have to start again after the servicing rights are sold, since such deals are not usually transferred, said lawyer Max Gardner.

(Source.)  The failure  to “Go to NY and file a motion” would mean that the homeowners and the lawyers would potentially be in contempt of court.

Ally has more to fear than simply modifying mortgages to try to get the money flowing into it again: a letter from the accounting firm hired to review loans as part of a prior agreement with regulators (if you’re keeping track there are about 13 zillion agreements between the banks and the federal government, all of them agreeing to keep on agreeing to not violate the laws) said that ALly:

— started foreclosure proceedings on 1,270 borrowers who were in some stage of the bankruptcy process, and thus should have been protected from foreclosure.

–carried out foreclosure sales on 1,577 borrowers who were awaiting a decision about a loan modification.

— hired a law firm that was subsequently “delisted” to process 30,235 foreclosures. The names of the firms are redacted, but presumably include several of those accused of forging documents as part of the robo-signing scandal.

— denied 50,030 borrowers for a government-run Home Affordable Modification Program, and then offered no alternative modification.

That is: Ally has about 85,000 problematic foreclosures according to its own accountants.  And “problematic” equals potential civil claims.

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2 thoughts on “GMAC/Ally to Homeowners: Heads I Win, Tails You Lose

  1. GMAC filed for BK . I have a law suit for a post forclosure filed may 2010 I want to have a release of stay and pursue Homcomings financial need a lawyer in new york to help move my case along filed in chatsworth courthouse# PC048203

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  2. I need help! I have a GMAC mortgage that has gone into foreclosure. GMAC called in August and said I was approved for a trial loan modification and if I made the next 3 payments, my loan would be modified at the new rate. I still could not afford the new payments, but figured that gave me 3 more months in the house. Can anyone tell me what the ResCap bankruptcy means to someone in foreclosure? Am I just in limbo until after the bankruptcy or will they continue with foreclosure proceedings? The right hand at GMAC does not know what the left hand is doing….. I talk with different people all the time and can never get the same answer twice!
    Thank you

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