Ally Financial Inc., the auto and home lender majority owned by the U.S. government, said its mortgage unit reached a $462 million settlement to resolve repurchase claims by Fannie Mae on $292 billion in home loans.
Ally, formerly known as GMAC Inc., said the settlement covers loans serviced by its GMAC Mortgage unit for Fannie Mae before June 30 and mortgage-backed securities it sold to Fannie Mae. The accord was reached on behalf of Ally’s Residential Capital unit and some of its subsidiaries, the Detroit-based company said today in a statement.
Chief Executive Officer Michael Carpenter, preparing Ally for a share sale that would allow the government to withdraw support, is trying to resolve ResCap’s losses linked to representations and warranties on home loans. Mortgage buyers invoke the clauses to force lenders to buy back faulty loans.
By Natalie Doss and Nishad Majmudar – Nov 3, 2010 11:32 AM ET
Ally Financial Inc., the auto and home lender, said the company was “embarrassed” that it used so-called robosigners to fill out foreclosure documents.
“We screwed up,” Chief Executive Officer Michael Carpenter, 63, said today during a conference call on third- quarter earnings for Detroit-based Ally. “We had a robosigner affidavit problem. No question about it. We’re embarrassed about it and we fixed it going forward.”
Any errors will be corrected and the company is “confident that we did not foreclose on anybody inappropriately,” Carpenter said. “It’s up to us to prove that.”
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