Ally Bank can’t quite kick its robosigning problem.
Ally, the government-owned lender that operates the GMAC car-lending business as well as a big mortgage company, said Tuesday it has resolved 90% of the foreclosure cases that were put on hold last fall when it came to light the bank’s processes had run afoul of state laws.
Ally said that of 25,000 or so affidavits that it identified for review at the end of the third quarter, all but 2,548 have been “remediated or, where necessary, re-executed.” Foreclosures in those cases have resumed.
Ally was the first U.S. bank to admit its handling of foreclosure paperwork was less than flawless, with employees reportedly signing off on hundreds of cases at a sitting – a practice that doesn’t square with rules obliging affidavit signers to certify to the court they have knowledge of each case.
Foes of the banks have been saying that the robosigning fiasco and related court rulings could, if nothing else, mire the industry in costly litigation for years. Ally, for its part, surely views putting the lion’s share of these cases to bed within four months as a success.
Yet as has so often been the case throughout the mortgage mess, it is impossible to this development clearly in either the win or loss column.
Take Ally’s announcement Tuesday, which acknowledged the bank has 2,540 foreclosures cases in three states that aren’t likely to resume any time soon, because “further guidance from the states on remediation efforts is required.”
Ally didn’t say what sort of guidance it was looking for, but when asked it named the three states as Illinois, New Jersey and New York. New Jersey is the state where a court last year told the banks they would have to prove they have acted lawfully before they can proceed on any more foreclosures.
“Remediation has not yet been completed in Illinois, New York and New Jersey as we continue to work with our counsel and the courts to remediate any remaining outstanding issues in those states and to review home preservation opportunities where appropriate,” Ally said.
The bank also noted, as the banks are wont to do, that it “has not found any evidence of inappropriate foreclosures in its review process to date related to the affidavit matter.” Not that it would have brought the subject up otherwise, of course.
