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GMAC MORTGAGE CORPORATION ISSUES ANNOUNCEMENT

 GMAC MORTGAGE CORPORATION ISSUES ANNOUNCEMENT
 ELKINS PARK, Pa., Jan. 27 /PRNewswire/ -- GMAC Mortgage Corporation


(GMACM) announced today that to avoid further lengthy and costly litigation, and to minimize customer concern, it had reached an agreement with the Attorneys General from 12 states with respect to prospective changes in the company's administrative practices for handling homeowner escrow accounts.
 The Final Judgment, filed in the U.S. District Court, Southern District, New York, sets forth the terms of the settlement.
 "We are pleased that the settlement was a collaborative effort between GMAC Mortgage and the staffs of the Attorneys General," commented Geoffrey C. Thomas, president of GMAC Mortgage. "The manner in which GMAC Mortgage computes escrows is substantially similar to the procedures used by the rest of the industry. We have steadfastly maintained and firmly believe our current practices are in full compliance with applicable federal and state laws, including the Real Estate Settlement Procedures Act (RESPA), and are in full compliance with the terms of the company's mortgage contracts with its customers. The settlement allows GMAC Mortgage to move forward and concentrate on the business of serving our customers and leaves it to government officials who have conflicting views as to the manner in which escrows should be maintained to establish uniform methods for the industry."
 The settlement was reached by GMAC Mortgage and the Attorneys General with respect to a difference of opinion over interpretations of RESPA and mortgage contracts. A new escrow methodology was agreed to by the company and the Attorneys General incorporating many of the positions asserted by each party. The settlement provides for future changes in the company's escrow methodology and will be implemented over the 12-month period after the Final Judgment is signed by the court.
 While this new method escrow analysis will not necessarily result in lower escrow account balances for all mortgagors, GMAC Mortgage said it believes overall escrow balances held by it will decline. GMAC Mortgage said it will not be required to make any payment from its corporation funds other than the payment of $70,000 to each of seven states and $7,000 to each of five other states for partial reimbursement of their expenses, cost of investigation and attorneys fees for consumer education purposes.
 Thomas continued, "The settlement represents the resolution of our disagreements with the Attorneys General over the industry standard escrow practices that we utilize. The Attorneys General arbitrarily singled out GMAC Mortgage and its escrow procedures as representative of the industry's practices. We cooperated fully with the Attorneys General when they commenced their study of industry practices in 1988 and have provided them with information, on an ongoing basis over the last three years. The Attorneys General issued a report in April 1990 containing a number of conclusions about the industry's escrow practices. We took exception to many of their conclusions and believe that a number of the assumptions utilized in the report were not appropriate."
 /delval/
 -0- 1/27/92
 /CONTACT: Richard Gillespie of GMAC Mortgage Corporation, 215-881-1427/ CO: GMAC Mortgage Corporation ST: Pennsylvania IN: SU:


CC-LA -- PH018 -- 3689 01/27/92 11:22 EST
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Publication:PR Newswire
Date:Jan 27, 1992
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