MBS RECAP: 12/2/2011

(Reuters) – GMAC Mortgage, the mortgage origination and servicing operation of Ally Financial Inc, said it will stop purchasing new mortgage loans in Massachusetts that are originated by correspondent lenders and wholesale brokers.

The move comes a day after the Massachusetts attorney general filed a lawsuit against five large U.S. banks — Bank of America, JPMorgan Chase Co, Citigroup, Wells Fargo Co and GMAC — accusing them of deceptive foreclosure practices, such as using robo-signers and false documents.

“GMAC Mortgage has taken this action because recent developments have led mortgage lending in Massachusetts to no longer be viable,” the company said in a statement.

GMAC said it will honor all commitments made with such lenders as of Dec. 5, 2011 and will continue to service its existing customers and honor its contractual obligations as a servicer.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/238234.aspx

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