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Ally Financial firms paying $198M for US claims

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July 26, 2013 03:07 PM EST | AP


WASHINGTON — Ally Financial and its related companies are paying about $198 million to settle federal complaints that the companies wrongfully foreclosed on homeowners.

The Federal Reserve announced the agreement Friday with Ally Financial, the former lending arm of General Motors known as GMAC Mortgage.

Ally's settlement is similar to accords between federal regulators and 13 other banks that ended a review of loan files required under a 2011 government action. Combined, the 13 banks are paying about $9.3 billion.

GMAC received a $17.2 billion bailout during the 2008 financial crisis. The government still owns 74 percent of the company. Its affiliated mortgage-lending company Residential Capital, or ResCap, filed for bankruptcy protection last year.