Forum Post: Massachusetts Sues 5 Banks Over Foreclosure Practices: “There is no question that the deceptive and utinlawful conduct by Wall Street and the large banks played a central role in this crisis through predatory lending and securitizaon of those loans"NYTime
Posted 12 years ago on Dec. 2, 2011, 6:36 p.m. EST by FedWallFedWellFedUP
(183)
This content is user submitted and not an official statement
“There is no question that the deceptive and unlawful conduct by Wall Street and the large banks played a central role in this crisis through predatory lending and securitization of those loans,” Ms. Coakley said at a news conference announcing the lawsuit. “The banks may think they are too big to fail or too big to care about the impact of their actions, but we believe they are not too big to have to obey the law.” http://www.nytimes.com/2011/12/02/business/major-banks-face-new-foreclosure-suit.html?src=recg
Nice Post FedWallFedWellFedUP!
(MaxKeiser) "Crybaby, Bailed-Out GM/GMAC Throws a Fit. I have predicted this for quite some time. When the law starts to catch up with these banksters, they will simply pull up stakes and leave town."
http://maxkeiser.com/2011/12/02/crybaby-bailed-out-gm-throws-a-fit/
::::::::::::GMAC Mortgage Cuts Back on Massachusetts Lending::::::::::::
http://online.wsj.com/article/SB10001424052970204826704577074472429606152.html
::::::::::::::::GMAC, Massachusetts Trade Salvos in Mortgage Fight::::::::::::::::
BY DAVID BENOIT & BEN FOX RUBIN
http://online.wsj.com/article/SB10001424052970204826704577074472429606152.html
-December 2, 2011-
(WSJ) GMAC Mortgage, the mortgage lender of Ally Financial Inc., is exiting the vast majority of its lending in Massachusetts a day after the state sued it and other lenders over its allegedly improper foreclosure practices, a decision the state's attorney general called an admission.
The nation's fifth-largest mortgage originator said it "has taken this action because recent developments have led mortgage lending in Massachusetts to no longer be viable."
GMAC's move, ratcheting up the high-stakes mortgage fight, comes after Massachusetts Attorney General Martha Coakley sued the five biggest mortgage servicers Thursday, in the first government lawsuit targeting all five for alleged improper foreclosure practices including so-called robo-signing.
The lenders responded that the state was hampering negotiations with all 50 state attorneys general aimed at reaching a broad agreement that would allow the mortgage market to get back on track. Ally had said Thursday that it would vigorously defend itself and was disappointed in the suit.
Ms. Coakley, responding in a statement to GMAC's move, said in order to do business in the state GMAC has to follow the law before foreclosing on homeowners. She said she was looking to hold the lenders accountable for actions and enforce the strict foreclosure laws in the state. "With today's action, it appears GMAC has acknowledged it has a problem following those laws and being held accountable for doing so," Ms. Coakley said.
A spokeswoman for Ally said Ms. Coakley's statement was "incorrect," adding the company is in full compliance with the law today. "Any suggestion related to past activity will be heard before the court, and we are confident in our ability to prevail," the spokeswoman said.
The Massachusetts civil suit, filed in Superior Court in the state's Suffolk County, alleges that the banks' foreclosure practices were unlawful and deceptive. The suit, which doesn't specify damages, contends the banks—Bank of America Corp http://quotes.wsj.com/bac ...J.P. Morgan Chase & Co http://quotes.wsj.com/JPM ...Wells Fargo & Co http://quotes.wsj.com/WFC ...Citigroup Inc. http://quotes.wsj.com/C ...and Ally—charted a "destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law."
The banks have in the past acknowledged problems with their foreclosure processes, but said they haven't found anyone who was wrongly foreclosed upon.The robo-signing practice involves people who allegedly signed many foreclosure documents without properly reviewing them.
GMAC Mortgage will stop purchasing loans from correspondent lenders and wholesale brokers, which makes up the majority of the company's business. The lender, owned 74% by the U.S. government, said it was "disappointed" but that "it has an obligation to manage risks and deploy capital in an appropriate manner and in a way that protects the investment of the U.S. taxpayer."
GMAC Mortgage had already said it was backing away from nationwide correspondent lending, in which smaller community banks originate the loan and sell it to GMAC, a business that made up about 84% of its total originations this year. The mortgage business, a much smaller portion of Ally's total revenues than auto lending, forced a $471 million write-down in the third quarter because of historically low interest rates.
Other mortgage lenders, including Bank of America, have said correspondent lending has become too risky and less profitable than lending directly to homeowners, which GMAC will continue to do in Massachusetts.
In Massachusetts, GMAC Mortgage was the No. 4 lender by volume of loans sold to Fannie Mae and Freddie Mac, the vast majority of lending in the state, said Guy Cecala of Inside Mortgage Finance. The state had also been outperforming the nation's mortgage market, with first-half Fannie and Freddie loans up 10%, double the nationwide growth rate.
"It also sends a signal to Massachusetts and other states that if you make it difficult for lenders to act they will take their business elsewhere," Mr. Cecala said of GMAC's decision. "There is no law you have to operate in all 50 states."
THIS IS HUGE!!!!
And make no mistake about it : without the NATIONAL AWAKENING that OWS is bringing forth, such action on the part of Massachussets would have been unthinkable.