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Analysis: Foreclosure "mess" unfolds state by state

Dan Levine Reuters
Analysis: Foreclosure "mess" unfolds state by state - analysis - United States - foreclosure


(Reuters) - An outcry over questionable foreclosures by GMAC Mortgage and other lenders is likely to hit some states more than others because of major differences in real estate law across the nation.



But ramifications for federal taxpayers and investors will depend on the costs of clearing up the problem, the latest fallout from the bursting of the U.S. real estate bubble.

GMAC Mortgage announced last week that it had suspended evictions and post-foreclosure closings in 23 states due to concerns over paperwork. In order for a lender to foreclose on a property, it must prove that it actually checked the borrower's loan agreements, and that the homeowner defaulted.

But the unit of Ally Financial, which is 56.3 percent owned by the U.S. government after a $17 billion bailout, said employees preparing foreclosures had submitted affidavits to judges containing information they did not personally verify.


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