Abigail Field On GMAC/Ally’s Assignment Problem
Yesterday Paul Kiel of ProPublica and Sophia Pearson of Bloomberg broke two document fraud stories that are probably inter-related. ProPublica exposed GMAC/Ally’s internal documents that apparently show Ally knowingly falsified documents to pursue foreclosures. Bloomberg reported that Ally is suing a former employee for stealing company documents related to their foreclosure processes. Both stories could use a little more context, however.
In HousingWire’s version of the Ally-sues-employee story, Ally comes across as duly outraged by the employee’s apparent deception, conflicts of interest and betrayal:
“Ally Financial said it discovered a foreclosure defense attorney was working for its mortgage unit and pilfering confidential information on the company’s foreclosure operations.
…Ally said [the attorney, Tanya L.] Blackwell signed a conflict of interest questionnaire at the inception of her employment that “clearly advised defendant that she had a duty to act soley in the best interest of Ally and to provide Ally with her individual loyalty,”…The company’s code of ethics also prohibited Blackwell from having a material interest or investment in any businesses that could create a conflict of interest”.
The context that helps evaluate Ally’s huffiness is Ally’s own conflicts. As a mortgage originator and securitizer it faces potential liability for lousy loans. And as a servicer of many securitized loans, it faces potential liability for not telling trustees about lousy loans. A reason to tell and not to tell–how’s that for a conflict of interest?
Check out the rest from Abigail here…