Is GMAC Deliberately Pushing People Into Foreclosure Even As They Request a Bailout?

[Stephanie]

Symbolman is not alone. A quick search turns up many complaints against GMAC:

http://www.ripoffreport.com/searchresults.asp?q1=ALL&q5=gmac+mortgage&q4=&q6=&q3=&q2=&q7=&searchtype=0&submit2=Search%21

http://www.complaintsboard.com/?search=gmac+mortgage

http://www.consumeraffairs.com/finance/gmac_mortgage.html

Here's one in more detail.

http://www.dailykos.com/story/2008/11/3/822/16964/236/650662

I have written a series of diaries on predatory lending. I published this yesterday, but since the news is barely covering this I think it's important that people understand that GMAC is currently in talks with the U.S government so that they can be protected from the consequences of their illegal behavior, while you and I bail them out! Few people seem to be a aware that GMAC owns a subsidiary called Homecomings Financial. Homecomings Financial is one of the most notorious and unstoppable predatory lenders. This company uses one of the most effective republican memes in that it is a wolf in sheeps clothing. Homecomings rushed into Louisianna after Hurricane Katrina and did some "special" financing for homeowners devastated by the hurricanes. They made big head lines with their generosity and no one blinked an eye but those of us who were busy drowing in our own private nightmares with Homecomings Financial. So here's the deal, GMAC wants some of that bailout money. They want the United States of America to insure their predatory loans. http://online.wsj.com/article/SB122523599523077969.html?mod=googlenews_wsj Wolf in Sheeps clothing. They want you and I to help them screw me and you!!

wavpeac's diary :: ::

You can read of my private nightmare http://www.dailykos.com/story/2008/9/17/93512/6968/609/601449 here. I have repeatedly documented the fact that Homecomings Financial has engaged in illegal behavior in the servicing of their sub prime loans. I have provided links that document one story after another, all complaining of the same violations. It makes me absolutely crazy to read these posts, but it lends credibility to the problem because the complaints have an eery invariant pattern of abuses. Read them here: http://www.complaintsboard.com/complaints/homecomings-financial-c4149.html

And if you don't believe me, would you believe Mr. William Black a professor from Missouri University in his testimony before the Agriculture Banking and Finance Committee when he testified that 40% of these subprime loans contain banking fraud? Or what about Mr. Alan Greenspan who gave the number as 10% in his testimony before congress. (I don't have links for either of these, but I saw them both with my own eyes. If anyone can supply the links let me know).

The complaints that you will find time and time again against Homecomings financial are the following:

they do not return calls, faxes or responses to certified mail. They relegate you to a voice message service where you are prompted to "leave a message" and never get a return call.

they put you in foreclosure and end all communication.

they apply payments erroneously.

they force insurance.

they charge illegal and miscellaneous fees that price the payments out of the realm of any real ability to repay back payments.

there is no help because the fees are a grey area that remain unregulated and they do not respond to
the new gov't help to restructure these loans.

they mess with escrow accounts.

These are violations of banking and finance laws. You will see people on these links are desperate for help and not finding it. I have been the recipient of well meaning advice on this board and others but none of the advice has worked to help me. I have filed a complaint with the FDIC, my attorney General and every class action lawsuit against them. They have huge legal teams which leaves the lawyers in my town, unwilling to go against them. My bankruptcy lawyer (and every lawyer I have spoken to, which includes about 15 of them) does not want to take a chance on figuring out whether or not my payments have been applied accurately because this is labor intensive. He has twice asked for my payment history and recieved nothing. (this is a violation of respa laws)He is concerned about the amount of work and whether or not he can win a substantial lawsuit with punitive damages in the current environment.

*snip*

If you have been victimized by Homecomings Financial you can join a class action lawsuit here. http://www.homecomingsfinancialclassaction.com/

==more at link==

Meanwhile it looks like GMAC itself might be headed toward bankruptcy:

http://news.yahoo.com/s/nm/20081212/bs_nm/us_gmac
As GM bailout falters, GMAC races its own deadline
By Jonathan Stempel Jonathan Stempel – Fri Dec 12, 12:20 pm ET

NEW YORK (Reuters) – The auto and mortgage finance company GMAC LLC raced on Friday to meet a self-imposed deadline to complete a debt swap that would qualify it for federal aid, and avoid what analysts called a potential bankruptcy.

GMAC is trying to swap $38 billion of debt for a smaller amount of debt, preferred stock and cash, in an effort to raise sufficient capital to become a bank holding company. This would make it eligible for capital infusions under the U.S. Treasury Department's $700-billion bank rescue plan.

The Detroit-based lender needs holders of 75 percent of the debt to agree to the swap, but on Wednesday said it was less than one-third of the way to that goal.

It extended a deadline for holders to swap their debt under more favorable terms to 5 p.m. EST on Friday. But it said that if the swap fails, it will withdraw its application to become a bank and explore other options.

"GMAC may need to extend the deadline," said Mirko Mikelic, a portfolio manager at Fifth Third Asset Management in Grand Rapids, Michigan, which invests $22 billion. "Becoming a bank holding company is pretty much GMAC's last lifeline. If it doesn't happen, then there's a very high likelihood of a Chapter 11 filing, at minimum."

Bankruptcy would be an admission of failure for private equity firm Cerberus Capital Management LP (CBS.UL), which in 2006 bought 51 percent of GMAC from General Motors Corp (GM.N). The automaker kept the rest.

==more at link==

[havocmom]

1. Thanks Stephanie. Was hoping some stalwart DUer would put this one together

Did the UAW cause all the GM ills? Or did GM's greedy expansion into other fields lead to this point?

Hmmmm, only 10% of the sticker price goes to the workers who built the car.... UAW members NOT the big drain on GM the bosses and the GOP would like us all to believe. Perhaps ventures into other things cost the parent company too much? Like maybe going into banking? GMAC seems to have come along shortly before GM really bled out.

[Donnachaidh]

2. the LACk of coverage by the MSM of this aspect is frightening

WTF aren't they reporting on this? While I don't have a problem with bailing out the auto section, I sure as heck don't want to bail out their banking area. Let THAT division fail.

[Peregrine]

5. You do know that GM doesn't own GMAC

Cherabis (or however it is spelled) owns it.

[justabob]

7. they still own 49% according to op

[azurnoir]

3. don't know much about gmac BUT if you have an FHA

mortgage through Wells-Fargo and are having problems making payments BEWARE they will lead you down the garden path to acceleration and foreclosure going as far as to tell you not NOT to make payments!!!! They will claim to be making arrangements with you and then tell you that they are mailing out paperwork which never arrives even after repeat calls asking about it, they will also tell you that you will receive certified letters that also those are a formality and automatically generated so don't worry, they are only supposed to deal with FHA mortgages though a department called Loss Mitigation they will refuse to transfer your call telling you "that's not how we do things". There are laws governing FHA loans and WF is most definitely not following them, if they have pulled any of these tactics on you or someone you know report them to the FHA administration in DC the number is 1-800-CALLFHA they need to be put a stop to.

[John Q. Citizen]

4. And remember. Don't call, write. Calling means nothing, not what yopu say, not what they say.

Only communications received in writing (in either direction) are worth anything and carry any weight.

There are no laws dealing with telephone communications. They can say anything, promise anything, threaten anything, but only what is in writing counts.

Under federal law, mortgage companies are required to responding in writing within thirty days of their receiving a question, a complaint, a request from you. Violating this is punishable by a 50 dollar fine, only enforcible through federal court.

My advice is to write multiple Corporation officers every single day if you see that they are screwing you. Even better would be a mortgage consumers letter writing campaign. 4 or 5 letters a day x a few thousand people will result in a lot of return letters being required under federal law. After a month or two of that, a class action law suit could be paid for.

This is the same for FHA or non FHA loans. It's spelled out under FEMA

[azurnoir]

6. In the case of FHA loans the duplicity is disgusting

these are about the only loans that will garner full value in a foreclosure situation and they by law have to work with you, with FHA an acceleration can not begin until you are at least 3 payments behind that is the law, what Wells Fargo is trying to do is artificially create that situation.

Basically it is an attempt to defraud the government ie tax payer

[John Q. Citizen]

8. Have you wrtten Wells Fargo? Phoning doesn't cut it. If you are sending them letters and

they refuse to reply you have something on them.

If your means of communications are by phone, you are banging your head against the wall.

I learned this back in the 90's when Chemical Bank was pocketing my escrow payments and simultaneously threatening me because they hadn't made disbursements for taxes and insurance as required by law. After three months on the phone every few days tons of BS and no action, i finally went to my local universities law library and educated myself. RESPA is the main federal law pertaining to mortgage servicing.

I also found US house hearings on people screwed over by mortgage companies, and it's amazing at how widespread the abuses are and how lacking remedies are for consumers. For one thing, all cases must be brought in federal court so it's prohibitively expensive for individuals to sue for redress.

[Thirtieschild]

9. GMAC is a losing proposition

GMAC bonds my mother bought for $2000 are now worth $238. I'm not sure when she bought them, but they're sinking like the Titantic.

[havocmom]

10. Kick

needs MUCH more exposure

[Stephanie]

11. For demobabe, another victim

I can't believe this is happening.

[Hannah Bell]

12. In 2007, GM made a profit making cars, but on GMAC, they lost A billion.