Feds Subpoena Mortgage Records From Ally Financial

Wednesday, 29 Jun 2011 10:08 AM

 

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Ally Financial says it has received subpoenas from federal investigators looking into mortgage fraud.

The company also says it will take a $100 million charge in the second quarter for payments it made to trusts to cover their losses on mortgage securities that went bad.

The Detroit company disclosed the payments and the investigation in a filing Wednesday with federal regulators. The filing is part of Ally's move to sell stock to the public.

The U.S. government owns 74 percent of Ally, which it got in exchange for a $17.2 billion bailout.

Ally is the former finance arm of General Motors and now is a separate auto and mortgage loan company. Ally has postponed its IPO because of a recent slump in the stock market.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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