Bloomberg | Ally Settles Fannie Buyback Demands for $462 Million

Ally Settles Fannie Buyback Demands for $462 Million

Ally Financial Inc., the auto and home lender majority owned by the U.S. government, said its mortgage unit reached a $462 million settlement to resolve repurchase claims by Fannie Mae on $292 billion in home loans.

Ally, formerly known as GMAC Inc., said the settlement covers loans serviced by its GMAC Mortgage unit for Fannie Mae before June 30 and mortgage-backed securities it sold to Fannie Mae. The accord was reached on behalf of Ally’s Residential Capital unit and some of its subsidiaries, the Detroit-based company said today in a statement.

Chief Executive Officer Michael Carpenter, preparing Ally for a share sale that would allow the government to withdraw support, is trying to resolve ResCap’s losses linked to representations and warranties on home loans. Mortgage buyers invoke the clauses to force lenders to buy back faulty loans.

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Comments
6 Responses to “Bloomberg | Ally Settles Fannie Buyback Demands for $462 Million”
  1. LVLawman says:

    Typical of corporate criminals. Steal a billion, get investigated (1-2 years), get sued (1-2 years) settle for pennies on the dollar, execs keep pay and bonuses. I’s love that deal.

    There is no incentive for corporate criminals to stop committing crimes. There is EVERY incentive to keep doing so (and they are), Wanna stop it; Indict and convict some Fortune 500 CEOs, COOs, CFOs and operational VPs. If not the beat goes on, and on, an on and on.

    Take it from a CPA, MBA, JD and former Treasury Department Special Agent. Only the petty criminal goes to jail or those, like Bernie Madoff, who steal from the rich and powerful. If your big enough and rich enough you can steal from the average Joe, ruin his life (and those of thousands of others) with IMPUNITY.

    This blog has helped more in my professional like than you know. I can never thank you enough. Keep up the great work.

  2. Jeff Rage says:

    Just a business expense for Ally: commit nuclear fraud, pay somes fines, go on your merry way – this is either more evidence that Fannie is a private corporation owned by Wall Street or we live in a Banana Republic. Come to think of, I think both are true.

  3. kravitz says:

    “MF Group said the decision to settle was not a political one even though Ally was at the heart of the recent foreclosure documentation mess. If it was a political deal, the payout would have been higher than what Ally had pegged, and there would have been other popular origination and servicing commitments attached to settlement.”

    http://www.housingwire.com/2010/12/28/mf-global-ally-fannie-mortgage-repurchase-deal-could-pave-way-for-more

    In other words, it was a pee pee whack. Not a real put-back.

  4. indio007 says:

    I guess $462 million is a small price to pay in exchange for withdrawal of subpoenas. They money doesn’t do you any good when your in jail. Better to cover-up the criminal activity and accept the financial loss…

  5. John R. says:

    Sorry, I live in Ohio and winter colds here are common and I woke with one this morning so I thought I’d ask here for a little help. As I read above, on a $292 Bil debt, Ally was allowed to settle it for only $462M. Now here’s the part where my heads not working quite right… If I take the $462 Mil and divide it by the $292 Bil I get a percentage amount of .158219178082%. So I’m thinking OK, if I had a $100 Thou mortgage and could pay it off at the same rate… how much would that be? And I did the math and got $158.22 (that would be the payoff amount… not a payment!). So is my math right? If so, what’s good for the geese? Know what I mean? If they want to change the rules, shouldn’t we all enjoy the same rule changes? I mean changing the rules goes against that ole ex post facto thingy called the law, so if they wanna do it, shouldn’t they at least PAY for doing it?

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