Bloomberg – Ally’s GMAC Unit Drops 250 Maryland Foreclosures Tied to Faulty Affidavits

By Sophia Pearson – Jan 18, 2011

Ally Financial Inc.’s GMAC Mortgage unit agreed to drop about 250 foreclosure cases in Maryland that were tied to defective affidavits, the company said today.

GMAC made the decision in November to dismiss and re-file active foreclosure cases that could have been affected by flawed foreclosure affidavits, Gina Proia, a spokeswoman for Ally said today in an e-mailed statement.

“We’re dismissing the cases but they will be re-filed,” Proia said. “The intention is to re-file the cases to go through the new foreclosure procedures in Maryland.”

GMAC’s decision comes after a Maryland nonprofit, Civil Justice Inc., agreed to drop a class-action lawsuit on behalf of homeowners whose foreclosure documents were signed by GMAC employee Jeffrey Stephan, Anthony DePastina, an attorney for Civil Justice, said in a phone interview. Stephan said in sworn depositions last year and in 2009 that he signed as many as 10,000 affidavits a month without checking their accuracy in a practice that has come to be known as “robo-signing.”

“Hopefully GMAC’s actions will set a precedent with other lenders where robo-signing has occurred,” DePastina said. “I think there will be a ripple effect throughout the country.”

DePastina said as many as 1,000 foreclosures may be tied to defective affidavits.

Ally’s GMAC Mortgage unit halted evictions in 23 states in September amid concerns over its handling of foreclosure documents. All 50 U.S. states are investigating mortgage firms after revelations that banks may have acted illegally in using so-called robo-signers to validate documents.