By Rick Rothacker
Feb 14 U.S. auto lender Ally Financial Inc has satisfied a requirement to provide $200 million in home loan modifications and other consumer relief under last year's $25 billion national mortgage settlement, the pact's monitor said on Thursday.
Ally, along with its subsidiaries Residential Capital and GMAC Mortgage, becomes the first of five mortgage servicers to complete its portion of the mandated customer assistance.
Joseph Smith, the former North Carolina state banking commissioner who is the monitor for the settlement, said he had filed a report with the U.S. District Court for the District of Columbia certifying Ally had met the requirement.
Ally is 74 percent owned by the U.S. government after a series of bailouts and is largely exiting the mortgage business to focus on auto lending. ResCap, which housed most of Ally's mortgage business, filed for bankruptcy in May and its operations were sold off in an auction last fall.
The lender and its subsidiaries have been credited with providing $257.4 million in consumer relief through loan modifications, short sales, principal forgiveness and other actions. The Ally units have only partially completed a requirement to solicit borrowers for the program, and they remain subject to servicing standards that were part of the settlement, Smith said.
Ally, Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Wells Fargo & Co agreed to the settlement a year ago to resolve allegations of robo-signing and other foreclosure abuses. Smith said he would release a report next week giving an update on how much relief the servicers provided from March 1 to December 31.
Reuters reported this week that federal and state officials are close to entering another round of settlements with additional servicers to resolve foreclosure abuses. [ID: nL1N0BBCPS]