Federal Court Allows GMAC to Resume Foreclosure Sales in Maine

Posted: Jan 17, 2011 |

The US District Court in Portland has allowed GMAC Mortgage Co to continue its foreclosure activities in Maine. The mortgage lender's foreclosures in the state have been put on hold since last month. However, the court said the decision has nothing to do with an underlying case involving the bank's allegedly fraudulent foreclosure practices.

It is still unclear how many households in Maine are undergoing foreclosure proceedings under GMAC. According to documents held by court, the lender has conducted up to 1,156 foreclosures in the state since January 2005. The documents did not indicate how many of those foreclosure cases have been sold or have remained open.

Despite the court go-signal for foreclosure resumption in Maine, GMAC is still facing a class-action charge filed by a number of homeowners in the state. Such complainants claim that the bank used fraudulent and improper documents handling practices to illegally accelerate pace of foreclosure cases. The lawsuit was filed in October in Cumberland County Superior Court, but the company managed to transfer it to the US District Court in Portland.


During a recent hearing for the case, the plaintiffs asked the court to halt all foreclosure activities of GMAC until legal issues are resolved. But Judge D. Brock Hornby did not issue such a temporary restraining order against the bank to enable the complainants' lawyers to remand the case to the state court.

He emphasized that the decision to allow resumption of foreclosures has nothing to do with the case. By the end of December, involved parties are expected to file their respective motions regarding the case.

The back-office practices of GMAC were held under fire following depositions for homeowners. A Pennsylvania-based processor for the bank has confirmed under oath that he processed and signed up to 10,000 foreclosure documents in a month. He admitted that he did not verify accuracy of information in the papers as required by Maine laws.

This practice, often referred to as ‘robo-signing,' has prompted investigations not just of GMAC, but also of other active mortgage lenders like Bank of America and JP Morgan Chase. GMAC is currently the fourth biggest bank in the country.

The class-action suit demands punitive and compensatory damages for affected homeowners in the state who had foreclosures under the bank in the last six years. The foreclosure cases include documents that were not processed in accordance to Maine foreclosure laws.

For more related news to foreclosures, visit ForeclosureConnections.com.

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