The key story from this morning was the Bloomberg report that GMAC Bank had halted foreclosures in 23 states, following disturbing news from last week that rekindled the latent debate over whether servicer banks do in fact own deeds to mortgages on which they foreclose on, and whether the entire foreclosure process is in fact fraudulent (one judge found it to be so, creating a massive headache precedent for the banker community). Yet the company which initially agreed with Bloomberg's version of events, is now retracing and claiming that foreclosures are in fact continuing... with a footnote. Reuters reports: "GMAC Mortgage, a unit of Ally Financial Inc, is continuing with all new residential foreclosures despite a report it had stopped them, a spokeswoman said on Monday. But some evictions have been suspended while the company reviews its internal procedures, the company said." Maybe the company can clarify just what event catalyzed the decision to suspend evictions, and specifically which "internal procedures" are being reviewed. Also, it is about time for the ABA to step in and share some insight on a topic that has millions of Americans suddenly in arms. And since that won't happen, it is up to the one or two politicians who are not in the bankers' (and the Fed's) pockets to raise some noise. Enter Alan Grayson who in a letter just released to a Florida Supreme Court Justice says:"If the reports I am hearing are true, the illegal foreclosures taking place represent the largest seizure of private property ever attempted by banks and government entities."

Grayson, best known for his endless skewering of Ben Bernanke and his henchmen during congressional hearings, has just sent a letter to Justice Canady of the Florida Supreme Court, demanding a halt to all illegal foreclosure activity. GMAC may have dodged the bullet, but the stink that Grayson is about to dig up may end up killing a massive, and illegal, funding loophole for the entire banking industry.

Full letter below: