Ally Financial to Withdraw and Refile 250 Foreclosure Cases in Maryland

According to a report by the ""Washington Post"":http://www.washingtonpost.com/wp-dyn/content/article/2011/01/18/AR2011011806433.html, ""Ally Financial"":http://www.ally.com/ announced Tuesday it is withdrawing all foreclosures in Maryland signed by an employee who admitted to being a ""robo-signer.""

Jeffery Stephan testified under oath that he signed off on thousands of foreclosure documents every month without

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verifying their accuracy or signing them in the presence of a notary.

Because of the controversy and potential paperwork errors, Ally has agreed to dismiss and re-file 250 active foreclosure cases in the state that he approved. But because the company does believe that the borrowers are actually in default, it is going to begin the foreclosure process again, adding months to an already lengthy procedure.

Ally Financial has been no stranger to negative attention regarding its foreclosure and mortgage practices in recent months. At the beginning of January the company's mortgage unit, Residential Capital, reached a $462 million agreement with Fannie Mae to cover potential contract breaches in mortgage backed securities. Ally was also the first major servicer to admit to problems within its foreclosure procedures.

""We had a robo-signer affidavit problem. No question about it. We're embarrassed about it and we fixed it going forward,"" said CEO Michael Carpenter in Ally's third-quarter conference call in November.