This could be interesting. Ally & GMAC basically were sending documents to the court that were stated as verified when they actually were not. In defense of GMAC, they most likely got the basic correct regardless like balance and time the borrower has been in default so they could be a non-issue once they straighten out their process and get corrective action in place.
The real question is when they have provide proof of the actual mortgage note that proved a legitimate claim on the home in the case of a default. Because of the securitization of these mortgages and the breakneck pace that these loans were originated, this is a very valid question and some borrowers have challenged this and won their case because the person foreclosing didn’t actually have the note.
You have to pay for these 0% APR car financing deals and GMAC found the perfect way, the U.S. taxpayer. It wasn’t enough to bailout GM to save American jobs but now we have to make sure their is financing for these cars even if there is not the demand for them compared to other automakers. How long until we finally let the market forces take their course and let the weak players fail or be taken over?
That means GMAC, like AIG, will get more aid from taxpayers, even though the prospect of repayment is on the wrong side of uncertain. Unlike AIG, GMAC was a disaster before the financial crisis’ darkest days. It finished 2006 losing money. In the third quarter of 2007 GMAC lost $1.6 billion, mostly on bad loans made by its residential mortgage arm. It lost $767 million in the third quarter of this year, $3.9 billion in the second quarter and $675 million in the first.
Surprise, surprise. Who would of thought that we would give more bailout money to GMAC (sarcasm)? Looks like GMAC needs another $7.5 billion in our hard earned tax dollars to provide low cost (or no cost) financing for more American made cars that people don’t want to buy.
If we are going to support our native automotive industry, it would be nice if we made them make cars and trucks are more viable in our current economic environment. What is even more interesting in this press release, is that our Treasury Secretary said that he thinks GMAC will need even more bailout in the future and he has determined we are ready to give it as needed…..period.
When did it become critical that people can buy a new car every year? I am just astonished that we are letting a car financing unit become a bank just so they can get access to our taxpayer funds. Mainstreet has been left in the cold and all we seem to care about is all the fat cats that did not make prudent choices to retain money for the bad times that always come. What direction are we trying to go, backwards or forwards?
GMAC LLC investors holding about $10.5 billion of bonds agreed to sweetened terms of a debt swap, bringing the auto and home lender closer to its goal of becoming a bank and getting a federal bailout.
The Fed’s actions in the treasury market is really sucking out much of the extra liquidity out of the market as people are using it as a flight to safety in these uncertain times. It is no surprise that the private markets could not come up with the $30 billion needed to give GMAC the capital they needed to met their obligation under commercial bank status.
GMAC LLC, the auto and home lender seeking federal aid, hasn’t obtained enough capital to become a bank holding company and may abandon the effort, casting new doubt on the firm’s ability to survive.