American Residential Equities files servicing suit against GMAC – NMP Skip to main content

American Residential Equities files servicing suit against GMAC

NationalMortgageProfessional.com
Jun 15, 2010

American Residential Equities LLC (ARE), a Miami-based real estate company that buys and liquidates pools of non-performing residential mortgages, has announced that it has filed a lawsuit against GMAC Mortgage Corporation. The suit, filed in the Southern District of Florida, alleges that GMAC failed to properly service mortgages and real estate-owned (REO) properties owned by ARE. In addition, ARE says in the suit that it was pressured by GMAC into offering preferential treatment and a loan modification to Georgia State Rep. Joe Heckstall’s brother, Cornelius Heckstall. For the past year, ARE has been working to arrange an orderly transfer of the servicing responsibilities for its loans away from GMAC. The company has since learned that GMAC allegedly failed to properly service a number of ARE mortgage loans and REO properties, at great detriment to ARE. “In violation of our agreement, GMAC has systematically mismanaged hundreds of loans and properties in our portfolio,” said Jeffrey Kirsch, president and chief executive officer of ARE. “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.” In addition, GMAC has refused ARE’s requests to audit its books and records. The suit alleges that GMAC failed to maintain properties, subjecting them to weather damage, vandalism and government fines. In other cases, properties were over-insured while timely insurance claims were not filed for other mortgaged properties. According to the lawsuit, Rep. Heckstall contacted GMAC on behalf of his brother and requested that his mortgage be modified a second time. ARE contends that GMAC pressured the company to offer a second mortgage modification to Cornelius Heckstall, despite the fact that he had failed to make payments according to an earlier loan modification with identical terms. “While GMAC repeatedly neglected the assets in our portfolio, they appeared to bend over backwards for Rep. Heckstall’s brother,” said Kirsch. “We bowed to the pressure because it gave us more time to find a competent replacement servicing company.” For more information, visit www.arenow.com.
Published
Jun 15, 2010
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