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TheStreet Open House

GMAC Halting Foreclosures

DETROIT (TheStreet) -- GMAC Mortgage is halting foreclosures in 23 states, according to an internal memo.

The troubled residential mortgage servicer, one of the largest in the country and a subsidiary of Ally Financial, told brokers and agents to stop the proceedings that included evictions, cash-for-key transactions and lockouts effective immediately, according to Bloomberg.

It's possible that GMAC will need to "take corrective action" in relation to the foreclosures, according to Sept. 17 memo, cited by Bloomberg.

Additionally, GMAC will also suspend property sales on already foreclosed properties. The memo says that brokers should notify the buyers that GMAC will extend closing dates by 30 days, the report says. Buyers will also have the right to cancel purchase intent and get refunded on their deposits, the memo reportedly says.

GMAC Financial Services was renamed Ally Financial in May. The renamed company is majority owned by the U.S. government, along with Cerberus and General Motors (GM) as owning large stakes in the troubled lender. GMAC-now-Ally held the largest amounts of financing for GM customers, however GM agreed in July to acquire AmeriCredit (ACF) .

--Written by Laurie Kulikowski in New York.



To contact the writer of this article, click here: Laurie Kulikowski.

To submit a news tip, send an email to: tips@thestreet.com.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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