GMAC Mortgage will review its foreclosure procedures in all 50 states, broadening an initial review that began about two months ago. The move follows Bank of America's (BAC) decision to do the same.
GMAC, which is a unit of Ally Bank, has hired a number of accounting and legal firms to go over its foreclosure procedures. The company earlier started reviewing foreclosure-related affidavits in 23 states, and in some cases halted the foreclosure process, though GMAC says it hasn't yet found evidence of "inappropriate" foreclosures.
"Foreclosure is a very serious matter and only implemented when all other home preservation options have been fully exhausted," the company said in a statement today. "We are taking these additional steps to restore confidence in the process, which is critical for the stability of the home and mortgage industry."
GMAC is at least the third financial institution in recent weeks to either review or suspend foreclosures because of the possibility that the sheer volume of documents prevented bank officials from actually reading, verifying or notarizing the documents they were signing.
Earlier this month, BofA said it would delay foreclosures on properties in 23 U.S. states to review whether its employees signed off on foreclosure documents without reading them. JPMorgan Chase (JPM) has also said it was delaying some foreclosures by a few weeks in order to better examine related documents.
Attorneys general in dozens of states plan to launch a joint probe into charges that banks used bogus paperwork to evict borrowers from their homes, the New York Post reported.