In Foreclosure Loophole: Itâ€™s A Paper Shuffle and You Can Beat It we opined that if you are currently going through the foreclosure process you should consider retaining an attorney to check the mortgage records listed in the electronic systems used by banks to transfer notes from one firm to another. Because there were so many institutions involved in the mortgage scams, from brokers to banks to securities firms, it is possible that your mortgage note is no longer owned by a single company. In some cases, notes may have gotten lost in the system, and though you may have been paying your monthly payment to a particular company, they may very well have no rights to those payments.
Today we learn that one of the larger mortgage brokers has suspended all foreclosure action in 23 states:
Ally Financial Inc.â€™s GMAC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York.
GMAC Mortgage may â€œneed to take corrective action in connection with some foreclosuresâ€ in the affected states, according to a two-page memo dated Sept. 17 and obtained by Bloomberg News. Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to stop evictions, cash-for-key transactions and lockouts, regardless of occupant type, with immediate effect, according to the document, addressed to GMAC preferred agents.
The company will also suspend sales of properties on which it has already foreclosed. The letter tells brokers to notify buyers that the company will extend the closing date on all sales by 30 days. Buyers will be able to cancel their agreement to purchase and get their deposit back, according to the letter.
It looks like somebody, somewhere in the mortgage business has realized that the entire system is corrupt. Not only will GMAC not evict people from their homes, they will not sell any homes on which they’ve already foreclosed.
This is clear admission of that they have no clue who owns the mortgage notes, and that they have likely foreclosed on homes to which they have no legal right.
Homeowners in foreclosure, or even those who think they may be making payments to a company that doesn’t own the note: Get an attorney, ASAP.