Ally Bank Halts Foreclosures in 23 States

September 20, 2010 3:37 PM EDT
According to a report from Bloomberg on Monday, Ally Financial Inc.'s GMAC Mortgage unit has told brokers and agents to stop foreclosures on homeowners in 23 states including Florida and New York.

In a two-page memo from last Friday obtained by Bloomberg, GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected areas of the country. The information was confirmed by a spokesman for Ally Financial.

The memo notified agents to stop evictions, and other foreclosure actions immediately regardless of occupant type.

The company will also suspend the sales of already foreclosed homes, as the letter tells brokers to alert buyers that the company will extend the closing date on all sales by 30 days. Ally will allow buyers to cancel their purchase agreement with the return of their deposit.

The state that will be affected include Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin

GMAC was fourth among U.S. home-loan lenders in the first half of 2010, with $26 billion in mortgages, according to Bloomberg. Wells Fargo & Co. (NYSE: WFC) was first with $160 billion and Citigroup Inc. (NYSE: C) was fifth with $25 billion.

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