Massachusetts calls for hearing into GMAC

, claiming that the taxpayer-owned bank is illegally foreclosing on people's homes in the state.

Massachusetts sued GMAC Mortgage and four other banks last week, saying they engaged in deceptive foreclosure practices. A day after the lawsuit was filed, GMAC Mortgage said it would stop much of its mortgage lending business in the state.

Ally Financial is 74 percent owned by American taxpayers after being bailed out by the government during the 2008 financial crisis.

In a letter to the U.S. House Committee on Financial Services, Massachusetts attorney general Martha Coakley said Ally Financial's subsidiary GMAC had broken laws by cutting corners while foreclosing on homes, which has exacerbated the nation's foreclosure crisis.

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