Tag Archives: Ally Financial

Ally Financial to pay $52 million in ResCap toxic mortgage bond settlement

Ally Financial will pay $52 million to settle allegations that one of its subsidiaries,Residential Capital (also called ResCap), knowingly marketed mortgage bonds despite the fact that the underlying mortgages were toxic, the U.S. Attorney’s Office announced Monday.

The settlement stems from 10 subprime residential mortgage-backed securities issued in 2006 and 2007.

Read on/

Former Ally Financial CEO reveals how Obama administration shook him down

And this is coming out of the mouth of a company who was taken over by the govenrment in the 2008 financial crisis.

The former CEO of Ally Financial Inc. says the Obama administration abused its power by holding the bank’s business hostage in order to coerce a record settlement of “trumped-up” racism charges and push profit-killing new regulations on the entire auto-lending industry.

The huge $100 million deal has spooked several other major lenders into resolving similar race-bias charges and offering below-market rates to minorities for car loans.

Michael A. Carpenter, who helmed Detroit-based Ally from 2009 to 2015, complained in an exclusive interview that Obama’s powerful consumer watchdog agency threatened to derail the bank’s efforts to obtain key regulatory approvals if it didn’t agree to settle the allegations out of court.

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Ally Financial getting back into mortgage business

Say what???

It’s back.

Two years after being completely driven from the mortgage business due to the losses suffered by its former subsidiaries, GMAC Mortgage and Residential Capital, also known as ResCap, Ally Financial (ALLY) is getting back into mortgages.

According to a report from Bloomberg, Ally will “inch back” into direct home loan originations in 2016.

From Bloomberg:

Ally, whose defunct GMAC Mortgage unit was one of the biggest lenders of subprime mortgages in the run-up to the 2008 housing bust, will inch back into direct home loan originations next year, the bank’s Chief Executive Officer Jeffrey Brown said this week at a Goldman Sachs Group Inc. financial conference in New York.

“Don’t think of this as Ally going down the road of the old GMAC,” Brown said, referring to the home lending unit that brought Ally to the brink of collapse.

The bank has no plans to securitize its originations, and it won’t keep any servicing rights or build out a servicing operation, Ally spokeswoman Gina Proia said in an e-mail. The bank will detail new product offerings, including a new credit card, at its investor conference in February.

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Ally Financial (Formerly GMAC) Admits DoJ Subpoenas On Mortgage-Related Activities


Via Ally’s 10-Q

Ally and its subsidiaries, including Ally Bank, are or may become involved from time to time in reviews, investigations, and proceedings (both formal and informal), and information-gathering requests, by government and self-regulatory agencies, including the FRB, FDIC, Utah Department of Financial Institutions (UDFI), Consumer Financial Protection Bureau (CFPB), U.S. Department of Justice (DOJ), SEC, and the Federal Trade Commission regarding their respective operations.

Such requests currently include subpoenas from each of the SEC and the DOJ. The subpoenas and document requests from the SEC include information covering a wide range of mortgage-related matters, and the subpoenas received from the DOJ include a broad request for documentation and other information in connection with its investigations of potential fraud and other potential legal violations related to mortgage-backed securities, as well as the origination and/or underwriting of mortgage loans.

In addition, we recently received a document request from the SEC in connection with itsinvestigation related to subprime automotive finance and related securitization activities.

Further, in December 2013, Ally Financial Inc. and Ally Bank entered into Consent Orders issued by the CFPB and the DOJ pertaining to the allegation of disparate impact in the automotive finance business, which resulted in a $98 million charge in the fourth quarter of 2013. The Consent Orders require Ally to create a compliance plan addressing, at a minimum, the communication of Ally’s expectations of Equal Credit Opportunity Act compliance to dealers, maintenance of Ally’s existing limits on dealer finance income for contracts acquired by Ally, and monitoring for potential discrimination both at the dealer level and within our portfolio of contracts acquired across all dealers. Ally formed a compliance committee consisting of certain Ally and Ally Bank directors to oversee Ally’s execution of the Consent Orders’ terms. Failure to achieve certain remediation targets could result in the payment of additional amounts in the future.

Investigations, proceedings, regulatory actions, or information-gathering requests that Ally is, or may become, involved in may result in material adverse consequences including without limitation, adverse judgments, settlements, fines, penalties, injunctions, or other actions.

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And this comes on the heels of GM Financial’s admission of Subprime Auto Loan Probes (via Bloomberg)

Investigations of the subprime auto finance business are spreading as General Motors Co. (GM) said its lending arm received additional subpoenas seeking details of its underwriting practices.

GM Financial, which specializes in loans to people with spotty credit, said in a regulatory filing yesterday that attorneys general of states it didn’t identify and other government offices are demanding documents related to its business of making car loans and pooling them into bonds that are sold to investors. The Detroit-based lender, along with Santander Consumer USA Holdings Inc., disclosed a similar probe by the U.S. Department of Justice in August.

The scrutiny is intensifying at the same time more borrowers are falling behind on their payments and sales of securities backed by the loans increase. Auto-finance firms that lend to people with bad credit lowered their standards amid increased competition as new entrants flooded the business to capitalize on cheap funding, according to Moody’s Investors Service.

“Subpoenas travel in packs,” Erik Gordon, a professor at the Ross School of Business at the University of Michigan, said by telephone. “There’s never one company in an industry subpoenaed because they’re mostly all doing the same thing.”


ResCap to Pay $230M to End Foreclosure Reviews

ResCap to Pay $230M to End Foreclosure Reviews

Residential Capital has won court permission to set aside $230 million for payments to homeowners whom the company may have foreclosed on improperly.

The former subprime mortgage unit of Ally Financial has received approval to enter into an agreement with the Federal Reserve Board that would end regulatory review of its foreclosure practices, Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan ruled on Wednesday.


Ally Financial fights with ResCap over foreclosure review

Ally Financial fights with ResCap over foreclosure review

Government-owned lender Ally Financial Inc. is sparring with its Residential Capital mortgage subsidiary over the unit’s efforts to get out of a federal foreclosure-review program.

ResCap, which is in Chapter 11 bankruptcy, said Ally would be on the hook for any amount of restitution the Federal Reserve is unable to recover from ResCap under the terms of an agreement Ally entered into with the U.S. government in 2011, according to a filing in U.S. Bankruptcy Court Friday.


Ally Financial’s ResCap Wants to End Foreclosure Review Process

Ally Financial’s ResCap Wants to End Foreclosure Review Process

Residential Capital LLC, the mortgage subsidiary of government-owned lender Ally Financial Inc., wants a bankruptcy judge’s assurance that the Federal Reserve and other government agencies can’t force it to continue conducting foreclosure reviews under a 2011 agreement.

Read more: http://www.foxbusiness.com/news/2013/02/28/ally-financial-rescap-wants-to-end-foreclosure-review-process/#ixzz2MGOMjaMs