Ally Financial Investigated By Regulators For Mortgage Fraud

06/29/2011 12:09 pm ET | Updated Aug 29, 2011

DETROIT (AP) -- 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.

Suggest a correction