GMAC enlists independent review of foreclosures

GMAC Mortgage said Tuesday that it has enlisted several legal and accounting firms to conduct independent reviews of its foreclosure procedures nationwide as questions grow over whether lenders improperly took back properties from thousands of homeowners.

The company, a unit of Ally Financial Inc., also said a review of cases in 23 states has found no evidence to date that the company has conducted any inappropriate foreclosures.

GMAC and other mortgage lenders have come under criticism as evidence has surfaced that they have been using flawed court papers to evict homeowners. That has led state and federal officials to ramp up pressure on the mortgage industry.

The special inspector general overseeing the financial industry bailout is investigating the company after an employee approved thousands of foreclosures without reading the paperwork. And attorneys general of up to 40 U.S. states are expected to announce a joint investigation into banks’ use of flawed foreclosure paperwork as early as this week.

Last month, GMAC halted certain evictions and sales of foreclosed homes to review cases in 23 states where foreclosures require judges’ approval. The review has been under way for about two months and is still ongoing, the company said.

GMAC said its foreclosure sales also receive an additional review to ensure that the company followed procedures to prevent foreclosure, that the timing of the foreclosure was appropriate and that the procedure complies with all state laws.

“We are taking these additional steps to restore confidence in the process, which is critical for the stability of the home and mortgage industry,” the company said.

In addition to GMAC, JPMorgan Chase and PNC suspended foreclosures amid evidence that bank employees falsely swore they had personal knowledge of a particular case, because documents could not be located or because of other paperwork problems.

On Friday, Bank of America became the first bank to halt foreclosures in all 50 states.