Ally Financial Reports Foreclosure Progress

Ally Financial, which owns and operates GMAC Mortgage, reports progress in clearing up its backlog of foreclosures, stalled when incidents of "robo-signing" and other irregularities came to light.

In its report of fourth quarter 2010 earnings, the bank said 90 percent of the foreclosure cases that had been put on hold are moving again, or have been resolved.

"During the fourth quarter, Ally's indirect subsidiary, GMAC Mortgage, continued to make significant progress in its review of foreclosure cases where an affidavit may have been used that was subject to a procedural issue," the bank said in its earnings statement. "Of the approximately 25,000 potentially affected affidavits identified at the end of the third quarter, all but 2,548 have been remediated or, where necessary, re-executed."

The bank said that as each of the files was addressed and deemed to be appropriate, the foreclosure process for those select cases continued to move forward. The remaining 2,540 involve homes in three states. Ally said it needs further guidance from the states on remediation efforts.

States go unnamed

The bank did not list the three states. Last year the State of Ohio sued GMAC Mortgage over the robo-signing revelations. The company also drew the attention of Illinois Attorney General Lisa Madigan, who last September demanded a meeting with company officials. Also last September, then-California Attorney General Edmund G. Brown Jr. directed Ally to prove immediately that it is complying with state law or, if it cannot, to cease and desist from foreclosing on California homes.

Ally defended its actions, saying GMAC Mortgage continues to "demonstrate a leadership position in preserving home ownership," having executed more than twice as many loan modifications than foreclosures. 

"Among the large servicers, the company's conversion rate for HAMP trial modifications to HAMP permanent modifications is 73 percent, a significantly higher success rate than that of its nearest competitor," the bank said in its report.

Ally said that since 2008, GMAC Mortgage has completed more than 610,000 default workouts for borrowers, which comprises 22 percent of loans serviced during that time period.