The government-owned Ally Financial has issued an offering book on Residential Capital Corp. in the hope that it can finally unload its money-losing mortgage division and take the rest of the company public, according to investment bankers familiar with the matter.

As press time, an Ally spokeswoman declined to comment.

The government had hoped to take all of Ally public last year and even filed an S-1 with the Securities and Exchange Commission but the deal went nowhere over concerns about ResCap's legal liabilities tied to the 'robo-signing' settlement and other lawsuits.

Now that the robo agreement has been finalized Ally is supposedly hopeful that it can sell the unit, which ranks both fifth in lending and servicing, according to figures compiled by National Mortgage News, and the Quarterly Data Report.

One investor in MSRs told NMN that any buyer of ResCap "will want to make sure that all the lawsuits are behind them before they pay up."

He cautioned that a pre-packaged bankruptcy/sale for ResCap may not work because it's unclear what the mortgage unit's bondholders might demand. "You could leave that legal liability at Ally and then try to take Ally public but I'm not sure how that would work either," said this investor who didn't want his name published because he conducts business with ResCap. "It's all about indemnifications."

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