An investor of distressed mortgages has filed a lawsuit against GMAC Mortgage Corp. alleging that the company mismanaged hundred of loans its owns. GMAC is also accused of pressuring the investor to accept a loan modification as a political favor.
The lawsuit was filed in the Southern District of Florida by American Residential Equities LLC, according to a news release today.
American Residential said it has been trying to arrange an orderly transfer of servicing from GMAC for a year.
Now the company says the properties have not been maintained and have been subjected to weather damage, vandalism and government fines. Some loans were over-insured, while others lacked timely insurance claim filings.
“In violation of our agreement, GMAC has systematically mismanaged hundreds of loans and properties in our portfolio,” American Residential President and Chief Executive Officer Jeffrey Kirsch said in the announcement. “Not only did they fail to complete the simplest activities required of all mortgages services companies, but they repeatedly disregarded our instructions, ignored our requests for reports and jeopardized our assets.”
GMAC spokesman James J. Olecki said in a statement that the company does not comment on pending litigation as a matter of policy.
But American Residential said GMAC refused the its requests to audit its records.
Miami-based American Residential also claims it was pressured by GMAC to offer preferential treatment and a second-lien loan modification to Cornelius Heckstall — the brother of Georgia State Rep. Joe Heckstall. The borrower had already reportedly defaulted on an identical prior modification.
