“GMAC is using bankruptcy to maximize its position in litigation,” said Tirelli. “It will proceed in foreclosures, but for any borrower with a claim against GMAC, they are saying, Sorry, go to NY and file a motion.’”

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As Predicted, Ally Bankruptcy Will Delay Loan Modifications, Settlement Actions for Borrowers

When Ally Financial’s mortgage unit Residential Capital filed for bankruptcy last week, I had an inkling it would spell trouble for the foreclosure fraud settlement the parent company signed with state and federal regulators. How would individuals get loan modifications in the midst of a bankruptcy proceeding?

Sure enough, the New York Post, which actually has somewhat decent housing coverage on occasion (and often more timely coverage than the “paper of record” New York Times), reports that this bankruptcy has already become a strain on families:

Two weeks ago, a Westchester family had finally reached the end of seven years in foreclosure hell.

Then the plate tectonics of the massive bank that controls their fate shifted. Ally Financial, formerly GMAC, filed Chapter 11 bankruptcy for its troubled Residential Capital mortgage unit last Monday. Ally owes taxpayers roughly $12 billion in bailout money and is majority-owned by Uncle Sam.

Unemployment caused the Westchester family to miss mortgage payments and seek Chapter 13 bankruptcy protection. Now they are in limbo, awaiting approval by the ResCap Chapter 11 judge.

“Resolution is on hold,” said the family’s lawyer, Linda Tirelli, who could not disclose more details because the deal is still pending. “GMAC has sought bankruptcy protection like many of its customers have.”

Rest here…

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4closureFraud.org