NEW YORK (Reuters) - Fallout over GMAC Mortgage's foreclosure practices deepened on Tuesday as Ohio's top law enforcement official asked courts in that state to review all foreclosure cases involving the Ally Financial Inc unit.
Richard Cordray, the state's attorney general, said he made his request after GMAC last week acknowledged that some employees were submitting affidavits in foreclosure proceedings without personally verifying the documents' contents.
This has raised doubt over GMAC's foreclosure process, including whether some borrowers lost their homes without good reason, exacerbating the nation's housing crisis.
It has also raised the specter that procedural shortfalls might be an industry wide problem, and not limited to GMAC.
Cordray said court oversight is needed to address the concerns of borrowers facing "absolutely desperate situations," and protect the integrity of the foreclosure process.
Ally said this month it has suspended evictions and post-foreclosure proceedings in 23 U.S. states, though it has not halted foreclosure proceedings.
"We're exercising an abundance of caution to preserve the integrity of the process," Ally spokeswoman Gina Proia said. "We're confident that the processing errors did not result in any inappropriate foreclosures."
Investigators in several states including California, Colorado, Connecticut and Illinois are investigating GMAC foreclosure practices or have asked the company to halt or defend its foreclosures.
John Suthers, Colorado's attorney general, in a September 27 letter to Ally's general counsel asked for an explanation of all of GMAC's foreclosure practices, "to ensure that fair and accurate representations are made when it pursues foreclosure actions" in that state.
JPMorgan Chase and Co., one of the biggest U.S. lenders, is separately being questioned about its practices by Florida lawyers who said one bank executive authorized a foreclosure without personally reviewing the underlying details. A bank spokesman declined to comment.
Proia says Ally hopes to address the "vast majority" of cases involving improperly signed affidavits by year end. (Reporting by Jonathan Stempel in New York; Additional reporting by Al Yoon; Editing by Kenneth Barry, Bernard Orr)