Court nixes two foreclosure counts
Two of the three counts in a class-action lawsuit brought against GMAC Mortgage Co. by Maine homeowners have been dismissed.
In a decision Wednesday, U.S. District Court Judge D. Brock Hornby dismissed an allegation of abuse of process and another of fraud on the court, according to the Portland Press Herald. GMAC, which made headlines late last year for allegations of foreclosure mismanagement, still faces one count of violating the state's Unfair Trade Practices Act. In his ruling, Hornby said that homeowners should challenge their foreclosure decisions in state court, "not...start a new lawsuit." If the judge decides GMAC did violate the state act, it would be held liable for damages and injunction relief.
Last fall, six Maine plaintiffs filed the suit against GMAC, seeking damages for themselves and other homeowners facing a foreclosure initiated by GMAC in the last six years and whose paperwork was not processed in compliance with state law, as well as a requirement that GMAC modify its foreclosure practices in Maine. GMAC temporarily halted foreclosure activities in a number of states to investigate its practices, after a GMAC employee admitted to signing about 10,000 documents a month without reading them. Other companies also suspended foreclosure proceedings, and all 50 states launched inquiries into the practices of a handful of lenders, including Bank of America and JP Morgan.
For more on the foreclosure controversy, read "Finding a door."
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