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Ally's Mortgage Units Exceed Consumer-Relief Obligations Under Mortgage Settlement

Ally Financial Inc.'s mortgage units have met their obligations to provide borrower relief under a national settlement reached last year with the country's largest mortgage servicers over improper foreclosure practices.

Joseph Smith Jr., the monitor overseeing the banks' compliance with the settlement, said Thursday Ally's mortgage businesses have provided $257.4 million to borrowers through loan modifications, principal forgiveness and other steps, exceeding a $200 million requirement for the company.

The company also has partially satisfied a separate requirement to solicit certain borrowers who may qualify for relief, Mr. Smith said in a statement.

Ally was one of five banks that agreed to a $25 billion deal that was finalized in March with federal agencies and 49 state attorneys general. The other banks were Bank of America Corp., J.P. Morgan Chase & Co., Citigroup Inc. and Wells Fargo & Co.

The bulk of Ally's mortgage activities were conducted through Residential Capital, its subsidiary that filed for Chapter 11 bankruptcy in May as litigation over soured mortgage securities mounted and bond payments loomed. Ally, which isn't part of the bankruptcy, has been trying to distance itself from the mortgage business as it tries to focus on its core auto-lending and online-banking businesses and repay the U.S. government, which owns 74% of Ally after providing $17.2 billion in bailout funds during the financial crisis.

Ally is in the process of selling a separate $122 billion mortgage-servicing portfolio held by its depository unit, Ally Bank.

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