Sept. 27, 2010 07:26 AM
Bloomberg News
Howard Cohen hasn't paid the loan on his Tukwila, Wash., home in a year, and when he heard that Ally Financial Inc.'s GMAC Mortgage unit was suspending foreclosure evictions in 23 states, it gave him hope.
"Maybe I'll stay in my house, too," said Cohen, a 57- year-old commercial-loan broker.
An employee of Ally's GMAC unit said in a December 2009 deposition that he signed thousands of foreclosure documents without verifying their accuracy. Attorneys general in Iowa, Illinois and Texas are investigating.
"If uncovering such deficiencies halts thousands of pending foreclosures or renders void those that have already taken place, including repossessions of homes that have been resold, it could snarl courts for years and further postpone a recovery that can't happen until real estate prices find a bottom," said Stuart Saft, a partner at New York-based Dewey & LeBoeuf LLP. Until home values start to rise, buyers will stay away, he said.
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