Ally Financial's chief executive said the company "screwed up on robo-signing affidavits," but has changed its foreclosure processes and will complete a review of about 25,000 affidavits by yearend.
"We had a robo-signer problem, no question about it. We're embarrassed about it and we've fixed it going forward," Ally CEO Michael Carpenter said Wednesday on a conference call to discuss third-quarter results. "We are confident that we did not foreclose on anybody inappropriately and it's up to us to prove that."
According to figures compiled by ASR sister publication National Mortgage News and the Quarterly Data Report, Residential Capital Corp., an Ally subsidiary, is the nation's fifth largest servicer with $400 billion in housing receivables.
Carpenter said Ally is taking "a second and third look" at foreclosure sales in all 50 states and has hired three law firms and an accounting firm to look at "what went wrong" and to oversee changes to its processes. "We have reworked, replaced the affidavits and done it properly even if we thought it was done properly in the first place," he said.
For the first time since Sept. 23 — when Ally's ResCap unit became the first major mortgage servicer to halt all residential foreclosures in the 23 states where they are handled in the courts — the company quantified the number of affidavits that will be reviewed and resubmitted to local courts. So far, 9,523 affidavits have been reviewed with "no evidence" of improper foreclosures, Carpenter said, leaving about 15,500 to go.
By comparison, JPMorgan Chase is reviewing 115,000 affidavits, Bank of America Corp., 102,000 and Wells Fargo, 55,000. The problem was that the affidavits were signed by employees who were not familiar with the information in the loan files, or were not signed in the presence of a notary.
Ally has increased the education and training of employees who sign documents and created a quality control team to review every foreclosure case. Carpenter said inquiries by federal regulators, a group of 50 state attorneys general and by Congress — which expects to hold hearings on the issue sometime this month — likely will take much longer than the review of affidavits.
ResCap also goes by the trade name GMAC Mortgage. Ally is majority owned by the U.S. Treasury.