GMAC Mortgage recently announced that it is temporarily suspending evictions and real-estate owned (REO) closings related to certain foreclosures that have been challenged in court. The company is supposedly investigating those foreclosures to make sure that they were done correctly. Earlier this week it was announced that GMAC had called a moratorium on foreclosures in 23 states due to fears that they were done incorrectly; they subsequently denied that report. But regardless of the details of GMAC’s foreclosure “suspension” or “moratorium” the company’s move is just another sign that all is not well in paradise.
Many homeowners have complained for the past two years that they were being unfairly handled by mortgage companies during this foreclosure crisis. Many mortgage companies came under suspicion after it was revealed that many homeowner battling foreclosure were faced with a tower of bureaucratic red tape just to find out how they could get mortgage modifications. And even when homeowners received temporary modifications, massive numbers of them found it nearly impossible to qualify for the permanent modifications necessary to save their homes. We all know that the mortgages that many of these homeowners were placed in are toxic.
GMAC, along with other mortgage lenders, made a killing placing homeowners in subprime mortgages and now that this foreclosure crisis is here, they are refusing to budge and make those mortgages affordable for homeowners so that they can avoid foreclosure. And in some cases, mortgage companies are failing to get the proper documents so that they can file foreclosure legally. GMAC’s “suspension” of certain foreclosures is just another sign of the “dirty work” that many mortgage companies and their agents are engaged in when foreclosing on residential properties.