Update on the Attorney General’s Lawsuit Against GMAC Mortgage LLC.

Final Update:

On March 15, 2016 the Supreme Court of Ohio finally dismissed this case as improvidently accepted for review. Slip Opinion No. 2016-Ohio-985. GMAC mortgage had filed for bankruptcy in 2012, none of the remaining plaintiffs in this case filed a proof of claim in the bankruptcy proceeding, and therefore cannot further pursue their claims in the federal proceedings. The issues raised in this case have now been fully resolved by the Supreme Court of Ohio in Anderson v. Barclay’s Capital Real Estate, Inc., 2013-Ohio-1933, which had been held for decision in the GMAC case, but was allowed to go forward once the bankruptcy petition was filed.

Further Update:

Because of the bankruptcy stay in this case, the Court allowed the case of Sondra Anderson v. Barclays Capital Real Estate Inc., d.b.a. Home
2011-0908 to proceed.  This case raised similar issues to the GMAC case.  The Court heard oral argument in the case February 27, 2013.  Read the analysis of the HomeEq case here.

On Feb 8, 2012, the Supreme Court of Ohio heard oral argument in State of Ohio ex rel. Michael DeWine, Attorney General of Ohio, et al. v. GMAC Mortgage, LLC, et al. # 2011-0890.

The issue in the case is whether mortgage servicers are covered under the Ohio Consumer Sales Practices Act so as to be held liable for civil penalties under the Act for engaging in unfair or deceptive practices in the litigation of foreclosure actions. The case got to the Supreme Court by certified questions from federal court.  Read the posts about this case here and here.

Two days before the oral argument in the case, Attorney General DeWine filed a notice informing the Court of a potential settlement. According to the notice, several of the large mortgage servicing companies proposed settlement offers to the attorneys general of all 50 States. Under the terms of the proposed settlement, the state attorneys general would agree to dismiss certain civil claims against the servicers, including the claims raised in this case.

On April 25, DeWine filed a notice of settlement in the case, and advised the Court of the dismissal of his federal lawsuit against GMAC Mortgage. He informed the Supreme Court of Ohio that because he had dismissed his complaint against GMAC, he should no longer be listed as a party in this certified-question case. But he also combined the notice with a motion asking  the Supreme Court of Ohio not to dismiss this case, and to answer the certified questions sent from federal court, because a group of private homeowners who are still parties to this case have the same issues against GMAC Mortgage as he had raised. He asked the Court to change his status from “Petitioner” to “Amicus Curiae” in the case at bar,  in support of the homeowners, and to re-caption the case as Lois Blank, et al. v. GMAC Mortgage, LLC, et al.

On May 14, 2012 GMAC Mortgage, LLC filed for bankruptcy in the Southern District of New York.  On June 20, 2012, the Supreme Court of Ohio granted an automatic stay of further proceedings in this case, pending resolution of the bankruptcy case.





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3 Responses to Update on the Attorney General’s Lawsuit Against GMAC Mortgage LLC.

  1. Andy Engel says:

    The Court also started the briefing clock in Anderson v. Barclays Capital Real Estate, which had been held for decision of the GMAC case. This is interesting because it provides the parties in Anderson the benefit of the oral argument in GMAC. During argument in GMAC, the Court members seemed very skeptical that any part of the mortgage servicing process actually falls within the definition of a “consumer transaction” under the CSPA. The argument did not go well for the Attorney General’s position on that point. The parties in Anderson will now be able to craft arguments that directly respond to specific lines of questioning.

    • MBettman says:

      Thanks, Andy. It will be interesting to see if the Court sets another oral argument for the same set of issues. I agree that the AG’s argument trying to fit the defintion of a consumer transaction into the CSPA did not go well.
      Marianna Bettman

  2. I applied for my Mortgage through GMAC Mortgage Corp. the next thing i now without notice they transferred my loan to OCWEN Loan Servicing Corp. and they are taking me for a loop I am oweing them money my mortgage keeps going up and a PMI was applied to my statement. I have never missed a mortgage payment so I don’t know why and when I call OCWEN they were unable to give me information. how is it that these people can do whatever they want with your money and not inform the customer. if someone can help me please send me the information

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