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Ally Financial (Formerly GMAC) Admits DoJ Subpoenas On Mortgage-Related Activities
If yesterday's Citi debacle was a buying opportunity (which it is according to the pre-market), then news that Ally Financial (formerly GMAC) is under regulatory and DoJ investigation must be great news:
- *ALLY CITES REQUEST FROM SEC ON SUBPRIME AUTO FINANCE PROBE & MORTGAGE-BACKED SECURITIES
- *ALLY SAYS REQUESTS INCLUDE SUBPOENAS FROM DOJ
Of course, do not forget that GM itself recently admitted to the DoJ probing its subprime auto loan underwriting practices. But, but, but - isn't this exactly what FHFA's Mel Watt wants?
Via Ally's 10-Q
Ally and its subsidiaries, including Ally Bank, are or may become involved from time to time in reviews, investigations, and proceedings (both formal and informal), and information-gathering requests, by government and self-regulatory agencies, including the FRB, FDIC, Utah Department of Financial Institutions (UDFI), Consumer Financial Protection Bureau (CFPB), U.S. Department of Justice (DOJ), SEC, and the Federal Trade Commission regarding their respective operations.
Such requests currently include subpoenas from each of the SEC and the DOJ. The subpoenas and document requests from the SEC include information covering a wide range of mortgage-related matters, and the subpoenas received from the DOJ include a broad request for documentation and other information in connection with its investigations of potential fraud and other potential legal violations related to mortgage-backed securities, as well as the origination and/or underwriting of mortgage loans.
In addition, we recently received a document request from the SEC in connection with its investigation related to subprime automotive finance and related securitization activities.
Further, in December 2013, Ally Financial Inc. and Ally Bank entered into Consent Orders issued by the CFPB and the DOJ pertaining to the allegation of disparate impact in the automotive finance business, which resulted in a $98 million charge in the fourth quarter of 2013. The Consent Orders require Ally to create a compliance plan addressing, at a minimum, the communication of Ally’s expectations of Equal Credit Opportunity Act compliance to dealers, maintenance of Ally’s existing limits on dealer finance income for contracts acquired by Ally, and monitoring for potential discrimination both at the dealer level and within our portfolio of contracts acquired across all dealers. Ally formed a compliance committee consisting of certain Ally and Ally Bank directors to oversee Ally’s execution of the Consent Orders’ terms. Failure to achieve certain remediation targets could result in the payment of additional amounts in the future.
Investigations, proceedings, regulatory actions, or information-gathering requests that Ally is, or may become, involved in may result in material adverse consequences including without limitation, adverse judgments, settlements, fines, penalties, injunctions, or other actions.
* * *
And this comes on the heels of GM Financial's admission of Subprime Auto Loan Probes (via Bloomberg)
Investigations of the subprime auto finance business are spreading as General Motors Co. (GM) said its lending arm received additional subpoenas seeking details of its underwriting practices.
GM Financial, which specializes in loans to people with spotty credit, said in a regulatory filing yesterday that attorneys general of states it didn’t identify and other government offices are demanding documents related to its business of making car loans and pooling them into bonds that are sold to investors. The Detroit-based lender, along with Santander Consumer USA Holdings Inc., disclosed a similar probe by the U.S. Department of Justice in August.
The scrutiny is intensifying at the same time more borrowers are falling behind on their payments and sales of securities backed by the loans increase. Auto-finance firms that lend to people with bad credit lowered their standards amid increased competition as new entrants flooded the business to capitalize on cheap funding, according to Moody’s Investors Service.
“Subpoenas travel in packs,” Erik Gordon, a professor at the Ross School of Business at the University of Michigan, said by telephone. “There’s never one company in an industry subpoenaed because they’re mostly all doing the same thing.”
* * *
But, but, but - isn't this exactly what FHFA's Mel Watt wants?
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Why couldn't we let these fuckers die?
US Govt stake in Ally is dwindling and once exit is complete i.e. mission accomplished (and safety net removed), would not be surprised to see moar...
Modern Ponzi:
Financialization
Liquidity Conduits
Keep up the image of health at all times.
Non-news story. Just read their financials. They specifically say they engage in lending to sub prime borrowers in the US, and further, mention this segment is less likely to repay. So really the lowest of the low.
I would provide a link. But I've already wasted enough time discussing this steaming pile of shit.
edgar is a good place to start if you are interested.
I didn't know you needed a subpoena to invite someone over for blowjobs and punch? Wish these fuckers would drop the pretenses.
That one is easy to solve, just change your name again...no one will notice.
Ally Financial is now "Clusterf*ck Financial"
I'm GMAC VP and MERS VP, Jeffrey Wayne Stephan, and I approve of the name change.
Bailout number two is coming down the pipes.
So a couple years from now maybe they'll be fined 10% and then resubsidized if that causes any stress.
doubtful...no longer that important in the big scheme of things.
Lotas of repos scheduling up for auction in 3, 2, 1.........
they have turned financing business into quasi-legal.
http://vimeo.com/m/1375322
"Details of underwriting practices..."
Ally Underwriting Guide:
Here is a mirror.
Breathe on it.
See fog?
Go to the finance manager, you are approved.
Don't see fog? Pass the mirror until someone fogs it for you.
This concludes the Ally Underwriting Guide. Happy motoring.
"Investigations of the subprime auto finance business are spreading as General Motors Co. (GM) said its lending arm received additional subpoenas seeking details of its underwriting practices."
Now that the horses are out of the barn and have been for years. So why now are they suddenly concerned?
Wash rinse repeat
$4,000 cash back and zero interest for five years.
Reminds me of the lazy boy furniture industry, don't forget electronic staple such as Best buy.
Derivatives collapse.
The idea of subprime loans, of any kind, teaches people it is not necessary to save and, otherwise, build honest credit worthy reputations. Slowly, this lesson has become endemic within our society.
Imagine the fuckers that owns several thousands in Detroit MBS and Ally and GMAC ALS bonds in hope of a confy retirement!
gm, ally= mini cb.