Foreclosure Freeze: GMAC's Ally Financial Halts Cases in 23 States

Ally Financial, a unit of GMAC Mortgage, again faces charges that employees did not verify foreclosure documents and will delay tens of thousands of foreclosures in 23 states. Ally was sanctioned for this in 2006.

Ally insists there is no moratorium on foreclosures, but does say it suspended evictions and REO closings that may have the same problems as those that were corrected after the 2006 court case.

While Ally would not comment on current allegations because they are still in court, it said a new process is already in the works, delaying some existing foreclosures but not affecting any new foreclosure actions. It expects to resolve the problem by the end of the year.

The new set of problems were exposed by attorneys at Ice Legal. During a deposition, it was discovered that Ally employees were signing off on affidavits in foreclosure cases filed with the court without personally verifying the information or signing the documents before a notary.