GMAC Keeps its Foreclosure Problem Fuzzy

Would you take a mortgage company public that has procedural and legal problems foreclosing on its borrowers? Well, that's hard to say. The company we're talking about (of course) is GMAC Mortgage which is one of several brand names that fall under Residential Capital Corp., which in turn is part of Ally Financial, which in turn is majority owned by the U.S. government. On Monday Bloomberg News reported that GMAC had halted foreclosures in 23 states. After the story broke Ally/ResCap/GMAC PR man James Olecki said it was "not true" that the servicer had instituted a "moratorium on all residential foreclosures" in 23 states. In a statement Olecki said "all new residential foreclosures" are continuing but admitted that some foreclosures have been suspended but only where a "potential issue" was raised "in a number of existing foreclosures challenging the internal procedure we used for executing one or more judicially required forms." What does all this gobbly-gook lawyer/PR speak mean? Olecki wouldn't expand on the statement but The Washington Post reported Tuesday morning that up in Maine lawsuits have been filed saying that a "single" Ally Financial employee may have approved "tens of thousands" of foreclosures across the nation without reviewing the documents he was signing. Ally/ResCap/GMAC, the nation's fourth largest residential lender, would like to go public some day. In all fairness to the company, it's no secret that every major servicer in the nation has faced lawsuits from attorneys who challenge certain foreclosures. It's a fact of life for servicers, even if Uncle Sam owns most of the shop…