Ally Financial mortgage resurgence proves there’s life after too-big-to-fail


Ally Financial announced this morning it is getting back into the mortgages in a big, digital way.

Key takeaways abound from the announcement; most notable is the revelation that the federal bailouts not only prevented financial catastrophes but allowed private business to proliferate in the long run.

Yes, we’re talking about the same Ally Financial previously known as GMAC.

Yes, this is the same GMAC that settled Consumer Financial Protection Bureau claims of discriminatory lending in auto loans and toxic ResCap residential mortgage-backed securities.

Yes, this is the same GMAC that suffered huge losses in the mortgage industry and received $17.2 billion in TARP assistance.

Now, Ally is well on its way to participate in the burgeoning mortgage market once again.

Years gone are the robo-signing controversies that plagued our housing finance market. Sadly, however troubling those days were, reporters still insist on referring to mortgages as forms of risk, constantly hinting of another bust to come.

In the case of GMAC, some arguef that while systemically important, GMAC, in fact, wasn’t too-big-to-fail.

As The Atlantic’s Daniel Indiviglio wrote in 2010, “GMAC, however, was no Bank of America or Citigroup. It wasn’t that interconnected like a Goldman Sachs either. It wasn’t too big to fail: it was too important to GM to fail.”

Well, it didn’t fail! For behold! Ally is back and doing mortgages once again.

And to use the words of Diane Morais, Ally Bank president and CEO, this time, they plan to “do it right.”

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