GMAC must explain thousands of potentially illegal foreclosures, says Illinois AG

Illinois Attorney General Lisa Madigan is demanding a meeting with mortgage lender Ally after an employee testified the company rubber-stamped thousands of affidavits supporting home foreclosures nationwide.

Madigan sent Ally -- which, despite being rebranded in July, is still commonly referred to as GMAC Mortgage -- a letter insisting on a meeting to address concerns the company violated the state's Consumer Fraud Act by foreclosing on Illinois homeowners after questions were raised about the accuracy of court documents it filed.

An Ally employee testified in a Florida court case that he routinely signed affidavits for foreclosures and submitted them to his corporate attorneys without reviewing homeowners' loan documents, Madigan's office said. These affidavits were then filed as evidence of Ally's right to foreclose.