WASHINGTON, July 27: GMAC Mortgage, a defunct unit of Ally Financial, will pay $230 million to borrowers as part of a government review of potentially flawed foreclosures, the Federal Reserve said Friday.
“More than 232,000 borrowers whose homes were in any stage of foreclosure in 2009 and 2010 with GMAC Mortgage will receive cash compensation,” the Fed said in a statement.
The move is similar to enforcement actions announced in early 2013 by the Fed and the Office of the Comptroller of the Currency involving 13 mortgage-servicing companies, the Fed said.
GMAC Mortgage, like those institutions, was hit with the enforcement action “for deficient practices in mortgage loan servicing and foreclosure processing,” the central bank said.
The Fed said the bankruptcy court that is overseeing the bankruptcy proceedings involving GMAC Mortgage had approved GMAC Mortgage participation in the cash payments. GMAC filed for Chapter 11 bankruptcy protection last year.—AFP