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Ally Financial on Friday told its mortgage banking clients that it will "significantly" curtail government lending tied to some government agencies, according to a internal memo. The affected agencies are the Federal Housing Administration, the Department of Veterans Affairs, and the Department of Agriculture.
April 13
The residential mortgage division of Ally Financial Inc. missed a scheduled payment on its debt Tuesday, laying the groundwork for an eventual default if the payment is not made up quickly.
According to a new filing with the Securities and Exchange Commission, Residential Capital Corp., an Ally subsidiary "did not make a semi-annual interest payment" on $1.75 billion of debt tied to notes yielding 6.5%.
The notes are due in 2013 with $473 million of principal currently outstanding.
The firm says in the filing: "The Indenture provides that a failure to pay interest on an interest payment date does not become an Event of Default (as defined in the Indenture) unless such failure continues for a period of 30 days."
A spokeswoman for the bank holding company said Ally will not be commenting at this time.
ResCap/GMAC is the nation's sixth largest home mortgage lender, and fifth largest servicer, according to figures compiled by National Mortgage News and the Quarterly Data Report.
Ally is 74% owned by the Treasury. ResCap has been undergoing costs cuts and recently shuttered its MBS trading desk and halted third-party GNMA lending.
The new SEC filing was signed by David J. DeBrunner, who is listed as the firm's vice president, chief accounting officer and controller.
