American Residential Equities Sues GMAC
Mortgage for Mismanaged Loan Servicing
Alleges Georgia Elected Official, GMAC Pressured Company for Favorable Treatment
June 15, 2010 04:40 PM Eastern Daylight Time
MIAMI--(EON: Enhanced Online News)--American Residential Equities, LLC, a Miami-based real estate
company that buys and liquidates pools of non-performing residential mortgages, today announced that it has filed a
lawsuit against GMAC Mortgage Corporation, one of the largest residential mortgage servicers in the nation. The
suit, filed in the Southern District of Florida, alleges that GMAC failed to properly service mortgages and REO
properties owned by ARE. In addition, ARE says in the lawsuit 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 CEO 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