Ally Financial Pays $462 Million Settlement to Clear Liability

By Kyle Chezum Updated on 12/28/2010

12/28/10  

Ally Financial, the lending institution previously known as GMAC, has agreed to pay $462 million to Fannie Mae.  Why?  According to Michael Carpenter, chief executive of Ally, the payment is intended to eliminate risk.  "At the start of 2010, we set a goal to substantially reduce the risk in our mortgage operation, and during the last twelve months, we have successfully completed a series of steps toward that objective and are largely complete," he said.

Ally came under fire during the height of the foreclosure crisis over suspicions that the lender was not properly reviewing foreclosure documents.  The $462 million settlement with Fannie is meant to mitigate the liability attached to any future legal proceedings or investigations.

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