Ally Financial Inc. is actively considering putting its ailing Residential Capital Corp. mortgage lending unit into bankruptcy, according to a report from Dow Jones.
Dow, quoting sources “familiar with the situation” said Ally is being advised by Kirkland Ellis and Evercore on a possible restructuring of ResCap.
At press time, a spokeswoman for Ally called the Dow report “highly speculative,” adding that “we don’t engage in commenting on speculation.”
Rumors about a possible bankruptcy for ResCap — the nation’s fourth largest residential lender and fifth largest servicer — first surfaced last week when during a conference call, Ally CEO Michael Carpenter said, “While Ally has, and continues to be supportive of ResCap that should not be interpreted to mean there is a blank check from the parent.”
Ally had hoped to take ResCap public this year, but scuttled such plans in the spring.
Mortgage industry officials that have been in meetings with Carpenter have described him as not being very fond of the residential business.
Ally, as a whole, lost $210 million in 3Q because of a large writedown on its mortgage servicing rights. It recently trimmed its correspondent lending division but maintains that it is committed to the channel as well as retail and wholesale lending.
The U.S. Treasury is a majority owner of Ally Financial
Daily Briefing | Friday, November 11, 2011
Fortress Winning Bidder on $50B of BoA MSRs?
Fortress Investment Group appears to be the winning bidder on a $50 billon package of mortgage servicing rights being peddled by Bank of America, according to industry analysts watching the deal.
REIT Industry Fears Mortgage Damage from SEC Rule
The Securities and Exchange Commission could hurt the housing recovery if it imposes tighter restrictions on real estate investment trusts that purchase and securitize mortgages, according to industry comments filed with the agency.
Servicers Struggle to Create Foreclosure Remediation Plan
Regulators have identified how borrowers may have been harmed by a multitude of foreclosure errors, but they are largely leaving it to the servicers and their consultants to figure out how to fix it.
GOP Wants to ‘Nationalize’ MERS
A new Senate bill proposing to wind down the GSEs by at least 10% a year also includes a provision that would replace the private MERS System with an identical platform run by the Federal Housing Finance Agency — along with new national standards for mortgage title transfers.
D.R. Horton Profits Despite Mortgage/Housing Challenges
Despite continuing housing market and mortgage-related challenges, builder D.R. Horton Inc. generated profits in its fourth fiscal quarter and full fiscal year ending Sept. 30 that improved upon the same quarter last year but were lower than FY 2010.
Ellie Mae Promotes Corr to COO
Mortgage technology vendor Ellie Mae on Friday announced that it has promoted Jonathan Corr to chief operating officer.
Morgan Stanley Agrees to New Mortgage Servicing Standards in N.Y.
The New York banking department has reached an agreement with Morgan Stanley to implement new mortgage servicing standards after signing a similar deal with Goldman Sachs in September.
GAO: Agencies Should Find Better Ways to Coordinate Dodd-Frank
The numerous agencies involved in financial regulation should find better ways to coordinate with each other as they seek to implement the massive Dodd-Frank Act, according to a government watchdog report released Thursday.
B of A Settles Charges that it Illegally Foreclosed on Military Personnel
Bank of America’s residential servicing department Friday entered into a settlement with the Department of Justice to reimburse members of the military whose homes were foreclosed on while they were on active duty.