This page has been archived and commenting is disabled.

GMAC's Full Letter To Agents... Something Does Not Add Up

Tyler Durden's picture




 

Zero Hedge has obtained the GMAC Letter referred to earlier by Bloomberg, and contrary to subsequent reports by the bailed out lender that this is merely a procedural adjustment, something does not add up. To wit, note statements such as:

Do not proceed with evictions, cash for keys transactions, or lockouts. All files should be placed on hold, regardless of occupant type.

Do not proceed with REO sale closings. GMAC Mortgage will communicate instructions to the assigned agent regarding the management of the properties in Pending status. If the contract has already been executed by both parties, the Asset Manager will request an amendment to extend the closing date by 30 days or as otherwise designated by the Asset Manager. Please provide appropriate notice to the REO purchaser that, pursuant to Section 1 of the GMAC Mortgage Addendum to Standard Purchase Contract, GMAC Mortgage is exercising its sole discretion to extend the Expiration Date of the Agreement by 30 days at this time. If the REO purchaser wishes to cancel the contract, GMAC Mortgage will terminate the Agreement and return the earnest money deposit.

And mostly: "There could be asset level exceptions and you will receive direct communication from GMAC on the handling of those exceptions."

In other words, the new revision is the de facto new standard, and not the exception to the rule, as GMAC's subsequent refutation would like to make it seem.

Why the sudden urgency? And why these 23 states in particular?

Once again, we welcome the MBA/ABA's chiming in on this development which could do more to hurt the banking profession's already abysmal reputation with the Main Street community than even the S&P hitting its fair value somewhere south of 400.

Full letter:

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 09/20/2010 - 18:44 | 593368 zaknick
zaknick's picture

o/t

 

About "Charlie" Munger's blatherings earlier:

 

"Before 1933 the people themselves had an effective way to demand economy. Before 1933, whenever the people became disturbed over Federal spending, they could redeem their paper currency in gold, and wait for common sense to return to Washington." - Howard Buffett, father of Wall Street legend Warren Buffett

 

How tunes have changed for these funny money billionaires.

 

Treason, plain and simple.

Mon, 09/20/2010 - 21:31 | 593716 stollcri
stollcri's picture

Are these two stories connected yet? I mean is good old Chuck worried about his banks having problems similar to GMAC's?

Mon, 09/20/2010 - 23:02 | 593866 Fox Moulder
Fox Moulder's picture

Can anyone near Wall Street or the Fed building in DC report on the late night pizza delivery index?

 

A couple of years ago there were reports of all night meetings with the local pizza shops running out of inventory. Next thing you know a few large banks started to blow up.

 

ETA: Oops, hit the wrong Reply button.

Mon, 09/20/2010 - 18:46 | 593371 Bob
Bob's picture

Perhaps those glossy prints of GMAC with their pants down were motivating them to hide their dirty laundry as long as they could, but once it hit the front pages they were "forced" to deny that it was them. 

"Those are not pictures of me--photoshop forgeries, I say!  Don't believe your eyes!"

Mon, 09/20/2010 - 18:46 | 593372 BORT
BORT's picture

Priveledged, Confidential and Attorney Client Priviledge means a lot less these days.  This all seems very shaky and uncontrolled.  Any one care to comment on what this means to assets held on the balance sheeet of banks?

Mon, 09/20/2010 - 20:05 | 593520 THE 4th Quadrant
THE 4th Quadrant's picture

Previous transactions is the question. How many homes that sold over the last year will be disputed and renegotiated at a lower price.

Toxic inventory put back on the banks balance sheet?

Mon, 09/20/2010 - 18:47 | 593373 Big Corked Boots
Big Corked Boots's picture

When I bought the farm (literally not figuratively) I went with a lender that was known in the community for solid ethics and for not selling the mortgage to some other service/lienholder.

If I had gone with Vinnie Goombatz Funding then I would have one of these loans-in-a-knot and could skip payments without fearing my mortgage would actually be traceable back to me for ongoing payments.

Where's the upside for doing the right thing?

Mon, 09/20/2010 - 18:51 | 593384 Bob
Bob's picture

Why are all the folks in good financial position pretending that they aren't better off than insolvent homeowners, regardless of "free rent"? 

C'mon, you're solvent, they're not.  You can get credit, aren't unemployed, no food stamps, etc.  Isn't that enough reward to keep the envy and resentment at bay?

For God's sakes.

Congrats on the farm.

Mon, 09/20/2010 - 19:30 | 593464 Big Corked Boots
Big Corked Boots's picture

I think the paradigm has changed. Why be proud of a credit rating when the very thought of obtaining something on credit is now absurd? Again, what's the advantage, in a world where everyone above you is waiting to stomp on you, everyone below you has a scam or an outstretched palm, and everyone alongside is trying not to step on a financial landmine. Life shouldn't be like this. This used to be America, where if you worked hard and got educated you moved up. Instead the middle class is just cannon fodder, and the poor are just leaches.

FWIW I'm massively underemployed and barely solvent.

Of course it could always be worse... but we should be looking up, not down.

Mon, 09/20/2010 - 19:52 | 593501 Bob
Bob's picture

Sincerely agreed.  But the grass is certainly not greener below and it is better for us and others to keep that in mind. 

Mon, 09/20/2010 - 20:08 | 593528 THE 4th Quadrant
THE 4th Quadrant's picture

To some, doing the right thing is: saving, waiting for the downswing, and buying value (without credit).

Mon, 09/20/2010 - 20:10 | 593535 nufio
nufio's picture

I would agree that you did not directly benefit from all the people buying mcmansions and lcd tvs with no income to show for it, but all that "growth" in the economy had some positive effect on your standard of living indirectly.
I am not defending their actions or blaming yours... but I think we all benefited to some extent in a very indirect way from the excesses of others be it, higher pay from employers, more profit from businesses, etc

Tue, 09/21/2010 - 03:21 | 594195 Garth
Garth's picture

No.  This is ignoring what is unseen.

Instead of building all those unneeded houses, the effort/labor/thought/materals could have been spent building or discovering other things of more use.  But you don't see them so you don't miss them.

But they are missing...

In addition, it's going to cost a huge amount to clean up this mess and we are going to pay for that in other unseen things which won't happen.

All this talk of children paying for things is mostly an illusion -- we pay now by not having what we could have had now...

 

 

Mon, 09/20/2010 - 23:31 | 593948 goldfish1
goldfish1's picture

When I bought the farm (literally AND figuratively) I went with a lender that was known in the community for solid ethics and for not selling the mortgage to some other service/lienholder.

Just thinking the same thing.

 

Mon, 09/20/2010 - 18:48 | 593376 kengland
kengland's picture

From AP (LMAO because it's so freakin sick. Where are the pitch forks)

In a deposition taken in December, GMAC employee Jeffrey Stephan said he signed 10,000 affidavits or similar documents a month without personally verifying who the mortgage holder was. That means many foreclosures could have taken place based on false documentation. Stephan could not be located for comment.

"That's hundreds of thousands of cases," said Ice Legal PA attorney Christopher Immel who took the deposition. "And there are other people at other places who sign these kinds of documents as well."

 

http://www.google.com/hostednews/ap/article/ALeqM5hB-ec0S7kA6n49Mn9AIDK_iWQZMwD9IBT5VO1

Mon, 09/20/2010 - 19:03 | 593394 Bob
Bob's picture

Am I gonna be the first to come out and just say what the vast majority of us know--backdating, falsifying paperwork, etc., is the norm in America.  Most of us are routinely expected to do it as "team players," i.e., a condition of keeping our jobs.  I just left mine due--in large part--to this. 

For the few who haven't done it themselves, you've seen it

Everybody knows this.  It's what makes the wheels turn. 

Mon, 09/20/2010 - 19:28 | 593457 Rainman
Rainman's picture

Yeeks. Amerika rolling along "normally" on a flatbed of larceny. Nothing new, but at least in the old days nobody ever wanted to kill the goose.

Mon, 09/20/2010 - 19:37 | 593476 blunderdog
blunderdog's picture

Shocked, simply shocked, that there's gambling...er, corruption, here in these great States of United.

 

Mon, 09/20/2010 - 19:42 | 593489 unununium
unununium's picture

I have not done it or seen it in my own workplace.  I have only read about options backdating, morgage fraud, etc. in the paper and online. 

But keep telling yourself that if it makes you feel better.

 

Mon, 09/20/2010 - 19:47 | 593495 Bob
Bob's picture

Hey, most of the people I've worked with--not in the real estate industry--couldn't see themselves that this is what they were doing. 

They were just expediently doing their jobs.  Like being "Good Germans." 

It is amazing what people can do without recognizing it themselves. 

Mon, 09/20/2010 - 19:54 | 593508 Rainman
Rainman's picture

Paychecks cause speech problems, hearing problems and blindness.....or so I am not told.

Tue, 09/21/2010 - 01:08 | 594100 Handle with care
Handle with care's picture

There's an old quote which goes something like,"Its amazing what a man can fail to understand when his pay check depends on it."

It always used to confuse me, but now it makes sense

Mon, 09/20/2010 - 22:23 | 593826 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

I quit within the hour when my manager instructed me to fill  out and sign as complete monthly inspections, prepaid maintenance contracts, that cost our customers on average $600.00 a month. That was in 1999. I was unemployed for 3 months without UE.

Doing the right thing is not always a choice. You are what you say and choose to do.

Tue, 09/21/2010 - 00:54 | 594077 Bob
Bob's picture

Damn straight.  It ain't easy giving up the paycheck.  But what price do you place on your conscience?

 

Mon, 09/20/2010 - 21:38 | 593736 RockyRacoon
RockyRacoon's picture

Maybe I am just naive, but GMAC (or anyone else for that matter) doing mass foreclosures doesn't look good politically.  Who is the major stockholder of GMAC?

Mon, 09/20/2010 - 18:50 | 593379 Rainman
Rainman's picture

The short sale realtors must really love this shafting !! And the prospective evictees celebrate !! 

I'm disappointed and confused that the Greatest Foreclosure State of Kalifornia never made the list.

Mon, 09/20/2010 - 19:01 | 593402 BurningFuld
BurningFuld's picture

Isn't GM a car company?? 

Mon, 09/20/2010 - 19:07 | 593417 cossack55
cossack55's picture

No, its a Federal sub-Cabinet Directorship assigned to the Treasury Dept.

Mon, 09/20/2010 - 21:37 | 593735 New_Meat
New_Meat's picture

... er ... health care thang discised (sp?) as a car builder--don't cha know. - Ned

Mon, 09/20/2010 - 19:03 | 593408 No One
No One's picture

Corrective Action = Find out if we actually hold the note.

Mon, 09/20/2010 - 19:15 | 593431 Attitude_Check
Attitude_Check's picture

Corrective action = Find out if anybody knows HOW to figure out WHO holds the note?  Or is the paper-work so bollixed that legal ownership has been lost, and the mortgage holder is actually squatting?

While you guy's are doing that - I'm finding countries that do not have extradition treaties with the US, and buying all the Gold I can with as much leverage as I can get - and packing my "bug-out bag".

Mon, 09/20/2010 - 19:05 | 593415 bullandbearwise
bullandbearwise's picture

http://www.youtube.com/watch?v=7qb0vquRcys

I want the disappearing mortgage pony.

Mon, 09/20/2010 - 19:12 | 593426 monopoly
monopoly's picture

Bob, that was a super post. Yes, we are solvent, we have little debt and pay our mortgage. It is so sad that so many in this country are in such a poor position. I have no regrets and wish all would be solvent.

Kudos to you sir.

Mon, 09/20/2010 - 19:37 | 593479 Village Idiot
Village Idiot's picture

"And why these 23 states in particular?"

 

Just a guess, but I recognize several of those States as having pretty severe predatory lending laws.

Mon, 09/20/2010 - 20:36 | 593598 reading
reading's picture

These are the judicial foreclosure states...

Mon, 09/20/2010 - 19:40 | 593482 blunderdog
blunderdog's picture

Not to take this just a tiny bit seriously for a moment, this could turn out to be a very exciting week for thems of us who like betting over/unders on the FDIC Failed Bank Friday pools.

Mon, 09/20/2010 - 19:44 | 593490 mynhair
mynhair's picture

Steel bars, bitchez!

Mon, 09/20/2010 - 19:48 | 593496 cougar_w
cougar_w's picture

Permit me to point out that any effort on the part of banks and the Feds to keep people strictly in their homes and on record for their loan -- paying or not -- would start out looking almost exactly like this.

Why would they do this? Because the wheels are fucking coming off.

The nightmare scenario is NOT that someone forecloses --  but that everyone forecloses. If not because they have no job, then because they may not have a job next month or because they are underwater on their loan or because they sense they can get away with foreclosing and living in the place for free.

The last three categories encompass just about everyone who didn't fall in the first.

If everyone forecloses, then the game is over. Just over. Homeowners bail, them as has keeps, and the Big Reset Button is pushed. 100 years later, everything is finally settled. In the meantime the realty and home loan industries entirely vanish from the face of the earth leaving not a single trace.

Not saying that is the case here. Just saying that if it was it would look just like this.

And a bunch of people with everything to lose would be shitting bricks and scrambling to fend off the greatest economic and financial meltdown ever seen evar.

Mon, 09/20/2010 - 19:59 | 593518 Nathan Muir
Nathan Muir's picture

It is the case IMHO.  I have three friends who have recently (last 90 days) decided to default simply due to negative equity.  All employed.  One example - bought in 2005 for $210k, no cash down, interest only loan.  Current value is $140k.  He makes about $45k/year.  Told me it was just good business to walk away....and I agree.

Mon, 09/20/2010 - 20:01 | 593519 Shameful
Shameful's picture

Prisoner's Dilemma.  When one group starts to foreclose and push some of the garbage though the system it hurts the position of all the other trash holders, their trash is further devalued.  Short of a cabal to keep the housing off the market the trickle almost has to kick up as insolvent banks try to get something on their asset.  The only real answer for them is Zimbabwe Ben stepping in as the buyer of last resort, or Uncle Sugar buttressing them up.  Of course both "solutions" is really moral hazard writ large, and could bring down the support system.  Bubbles popping are a bitch.

On the bright side would be glad to see the mortgage industry die.  Then maybe Americans would actually save to buy a house.  And in the act of savings realize that the Fed is molesting them and maybe just maybe stand up to the Fed.

Mon, 09/20/2010 - 21:41 | 593746 New_Meat
New_Meat's picture

yep, we're watching Jonny V. in action.

wow

- Ned

Mon, 09/20/2010 - 21:42 | 593749 New_Meat
New_Meat's picture

eat more ckiken.

- Ned

Mon, 09/20/2010 - 22:29 | 593802 themosmitsos
themosmitsos's picture

Tyler, I believe it's related to the TYPE of Deed the Lender is taking possession of as a result of the foreclosure proceedings and hence later conveying through the REO as seller.

I know FOR A FACT in IL, Lenders in REO sales like to convey "indirect deeds" [Quit Claims/Deeds in Lieu/Special Warranty Deeds] rather than direct clean Deeds with unequivocal “free & clear title” and chain of title from them [Lender REO] to you [buyer], unless the buyer asks for, and is insistent in pursuing that, ie “Warranty Deed.” I've had RE deals go sour over REO dept's refusal to close my purchase at Chicago Title & Trust even when I'm offering to pay the $1k cost [I shit you not!], rather than some shady secondary Title Co … often the attorney’s. With this trick, usually and at minimum, they’re trying to fuck you on the back RE taxes.

IT IS STANDARD PRACTISE BY LENDERS AFTER FORECLOSURE TO *NEVER* TAKE FULL TITLE & REGISTER W/LOCAL GOVERMENT ... excuse being the cost. However ...

In Illinois [everywhere] these types of Specially conveyed indirect deeds pass liability onto the purchaser because the Lender never FULLY took title but is ASSINGING you his rights. I've seen, for example, LONG after a case is closed, a defendant’s appeal filed & pursued, yes unsuccesfully, but against the NEW buyer as well as the Lender, post REO.

I know the GMAC situation is related to this because I can contrast this process w/foreclosure in Federal Court in Illinois, where the Lenders' REOs always have a DIRECT deed [Warranty] they're giving you as purchaser, not some form of title they're conveying to you.

Illinois State Law has very protective laws in place for individuals under foreclosure and State law is very sensitive to chain of title, title custody, and jurisdiction, while these are issues the while a step that 7th District Federal Judges scoff at. Lender’s claims to this effect [chain & custody] always suffice via the very existence of a loan.

I also know that Wisconsin & Indiana State Law in part have some of the same quirks/loopholes [on the list], and that Texas State Law does not [not on list].

Hence, I think it's related to the case where the servicer was found guilty of fraud, which sets a precedent regarding the establishment of chain of title & title custody, as it was also concurrent.

For ex, note that the States which do NOT recognize Special Warranty Deeds are not listed by GMAC

http://www.lawchek.com/resources/forms/que/deeds.htm

………………………………………….

An example:

You have *NO* idea of the shit REOs try to pull. People are fucking retarded. Once at a closing I got into a 3 ½hr argument w/the Closer, Seller’s [REO] atty, AND MY ATTY because the fucking RASPA didn’t add up and $12,5k of my money was missing. I was right. This, at Chicago Title & Trust no less………The house I’m in RIGHT NOW writing this, I bought in foreclosure in 2002 and the Lender tried to fuck me on the taxes. SIX MONTHS *AFTER* closing, I found out the Seller [Lender/REO] had NOT paid [released] the $17k in back taxes held at the closing because the seller’s atty conveniently hadn’t filed the paperwork, and we needed to close that day. Closed where? TICOR/Attorneys' Title Guaranty Fund [I REALLY wanted the property]. Deed? Special Warranty. Where would the tax $$ go if not paid and unclaimed after 12mths? Back to the seller. They can’t pull this shit if they give DIRECT title [was special deed] and if they close for ex at Chicago Title, because then CT would be holding the $$ in escrow, and NOT ATGF.

 

Best I can do :)

To clarify: Leaves new buyer, and hence Lender's REO on countersuit, exposed to liability by/through this new precedent setting case. It is IRRELEVANT whether the porperty would've ultimately been foreclosed anyways. If they commit fraud on title, what about on resale value and equity for ex? Normally this might not concern their legal departments [probably would anyways], but the amount of cases we're talking about here is voluminous and the legal fees would be substantial even to prove themselves within their original rights.

Mon, 09/20/2010 - 23:08 | 593913 williambanzai7
williambanzai7's picture

I have one simple question: Why is it OK to bail out the shareholders and creditors of GMAC, but not OK to bail out GMAC's borrowers.

These are the kind of financial zen koans we are now forced to unravel in order to understand our corrupt system.

Mon, 09/20/2010 - 23:46 | 593968 nedwardkelly
nedwardkelly's picture

 

Why bail out ANYONE? Whatever happened to accountability? Banks, individuals - no more f'ing bailouts.

Tue, 09/21/2010 - 11:55 | 594782 stollcri
stollcri's picture

That's right, help those rich, elite bastards close the door behind them.

They got their bailouts, the check cleared, and then helped stoke the "no more bailout" meme. Who really thinks that "Taxed Enough Already" movement was grass roots and not funded by wealthy individuals?

Of course we should be kissing their asses too, if it weren't for masters of the universe like Charlie Munger using government money to save us all we'd be wallowing in our own filth right now.

"Please, sir, I want some more."

Tue, 09/21/2010 - 00:11 | 594003 FischerBlack
FischerBlack's picture

Never one to pass up an opportunity for bad haiku:

Summer leaves turn brown

Ben rains money from the sky

GMAC dies

Tue, 09/21/2010 - 00:27 | 594021 eatthebanksters
eatthebanksters's picture

How about:

 

The autrumn wind grows cool

$30 Billion in goodwill disapears

The taxpayer gets fucked

Tue, 09/21/2010 - 00:45 | 594057 Lux Fiat
Lux Fiat's picture

Oh vast McMansion

So you are underwater

Will the bank now drown?

 

Tue, 09/21/2010 - 00:46 | 594061 litoralkey
litoralkey's picture

Go back to 2009.

Greece.

Major scandal engulfs the Prime Minister Kostas Karamanlis and the 
New Democracy (ΝΔ) Party in power.

Everyone know election season is coming in the last week of August, Parliament dissolves September 9.  Election season is ON!!

What is the first thing the New Democracy (ΝΔ) do to try to desperately hold on to power?

New Democracy (ΝΔ) Party pulls all the tax collectors of the streets and makes sure tax collections collapse for the rest of the year.

It didn't save Kostas Karamanlis and New Democracy (ΝΔ).

 

THE BANKS THAT THEIR VERY SURVIVAL DEPENDS UPON THE STATUS QUO ON CAPITOL HILL ARE ACTIVELY CAMPAIGNING BY ENDING THE FORECLOSURES IN THE RUN UP TO THE ELECTION.

Tue, 09/21/2010 - 01:56 | 594145 Mentaliusanything
Mentaliusanything's picture

Do any here have a 'Paid in full' Mortgage. I have but until recently never discharged it. My bank printout shows its paid. But on asking to discharge it (and paying a fee to the tile office) to receive the title deeds I have come across some problems. The titles office can't find it registered and the bank cannot find it's copy. They have sent me an official 'interim' letter stating that 'they have no further financial interest in the land and improvements thereon' and absolving me of all payments, fees and dues pursuant to the mortgage # ******/** dated **/**/*****. 5 months have elapsed and still I have not received the title deeds. I am starting to think that mine was bundled up some time ago and sold off like a slave girl in a Marrakesh meat market. My embarrassed Bank manager keeps telling me that to discharge it was silly because if I ever want to get a loan they have possession of my title deeds and that will save me costs on application fees.

What I want to know is 'have they used or are they using my property as collateral to raise capital ? '

Ever see a Bank Manager sweat while saying 'No never would happen that would be Fraud'

Shit what a Clusterfuck this banking bizzarro World has become. 

Tue, 09/21/2010 - 02:22 | 594164 honestann
honestann's picture

The only solution is to hang everyone who has anything whatsoever to do with the FiatCurrencies, FederalReserve and FractionalReserveBanking.  Otherwise, not much.

Tue, 09/21/2010 - 08:32 | 594356 ZeroPoint
ZeroPoint's picture

If I were you, I would get a lawyer and get that title, even if a judge has to order it remade.

Tue, 09/21/2010 - 09:07 | 594414 Justibone
Justibone's picture

+1.  Do it yesterday, IMO.

Tue, 09/21/2010 - 02:18 | 594160 Sudden Debt
Sudden Debt's picture

There is a maximum of 5 years they can keep those house where after that they need to sell the house direct at any price givin.

And as we are in year 4 of the actual crisis, houses are stacking up.

I wonder how come never writes about these deadlines...

Tue, 09/21/2010 - 08:37 | 594361 ZeroPoint
ZeroPoint's picture

Do you have any links? I would love to read more.

Thu, 10/07/2010 - 02:15 | 594165 honestann
honestann's picture

The fact is, the only title is an "allodial title".  Since less than 1% of land titles are "allodial titles", 99%+ of properties ARE part of gangster-bankster scams.

Tue, 09/21/2010 - 07:50 | 594307 Iceobar
Iceobar's picture

How-about

a) they can't absorb the continued losses

or

b) They're privy to some 'surprise' election goodie package in the works that would elevate RE values...

or

c) Lawyers saw Pandora's Box

Mon, 10/04/2010 - 04:29 | 623474 Herry12
Herry12's picture

Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
cheap site hosting
windows web hosting
windows vps hosting
windows vps

Do NOT follow this link or you will be banned from the site!