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After Ally put its ResCap mortgage unit into bankruptcy on Monday, ResCap CEO Tom Marano discussed the future of the unit’s assets and staff in an interview.
May 14 -
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.
April 17 -
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.
February 9
Nationstar Mortgage Holdings Inc. will likely face competition in its pursuit of Residential Capital LLC's mortgage assets, the bankrupt lender's chief executive said Thursday.
ResCap isn't concerned that creditor demands for an independent examiner to review transactions between the lender and its parent, Ally Financial Inc., would yield any "surprises," Thomas Marano, chairman and chief executive officer of ResCap, said in an interview.
ResCap, once one of the country's largest subprime mortgage lenders, proposed selling servicing rights to $374 billion of mortgages and other assets to Nationstar last month in a $2.4 billion deal. The plan was included as part of ResCap's Chapter 11 bankruptcy filing on May 14.
Nationstar's "stalking horse" bid is subject to other offers, which could come from competing mortgage servicer Ocwen Financial Corp. and several private-equity firms, Marano said.
Marano said he has heard Ocwen plans to file a competing bid, and "some of the private equity funds are looking to come in as well."
"My gut is you're going to see some of the typical" names, Marano said, declining to name specific private-equity firms that he expects to make bids.
Apollo Global Management LLC, BlackRock Inc., Blackstone Group LP and TPG would be logical bidders for ResCap assets, a person familiar with the matter said.
Ocwen is interested in bidding on ResCap's assets, John Britti, chief financial officer of the mortgage servicer, wrote in an email Thursday.
"Based on the pricing we have seen in the bankruptcy filing, we see value," Britti wrote. "We also believe that creditors and regulators are likely to prefer seeing the portfolio broken into parts."
Ocwen, like Nationstar, has been bulking up its operations as traditional lenders exit the mortgage-servicing business due to upcoming changes in capital requirements and increased regulatory scrutiny.
Spokesmen for Apollo and Blackstone declined to comment. Representatives for BlackRock and TPG didn't immediately respond to requests for comment.
ResCap is proposing a deadline of Sept. 14 for rival bids. If it receives any, an auction would be set for Sept. 25 at the Manhattan office of Morrison & Foerster LLP, ResCap's bankruptcy counsel. ResCap hopes to have a sale hearing by the end of October.
The company will ask a judge to approve its auction procedures at a June 18 hearing.
Despite potential competition, Nationstar is "uniquely qualified to do this deal," Marano said. "I do feel they are the best counterparty for the" government-sponsored enterprises.
Marano has led ResCap since 2008 and was previously a managing director for Cerberus Capital Management LP, which owns an 8.67% stake in Ally. He also was a senior managing director and head of mortgage and asset-backed securities at the former Bear Stearns & Co. Inc.
Nationstar, which is majority owned by Fortress Investment Group, is in the process of integrating a $63 billion servicing portfolio it is acquiring from Aurora Bank, which was part of Lehman Brothers Holdings Inc. On Monday, Nationstar said it was acquiring the servicing rights to $10.4 billion of mortgages from Bank of America Corp.
A representative for Nationstar did not immediately respond to requests for comment Thursday.
Creditors are seeking to investigate how the proposed deal was structured as well as transactions ResCap and Ally conducted in prior years.
Warren Buffett's Berkshire Hathaway Inc., one of ResCap's largest creditors, on Monday filed a motion to appoint an independent examiner to review the companies' relationships before and after the bankruptcy. Among the transactions Berkshire wants examined is Ally's acquisition of ResCap's ownership stake in the holding company for Ally Bank in 2009.
"This and other transactions may give rise to various potential claims that Ally and affiliates have harvested assets from ResCap and seek a quick and easy divorce through bankruptcy," Berkshire said in its motion.
If the judge approves the appointment of an examiner, "we'll be fine with it," Marano said.
"I am confident that this company was operated in a separate and distinct manner," Marano said. "We got fairness opinions on all the meaningful transactions, and I don't think there's going to be anything ... problematic."
A spokeswoman for ResCap declined to say whether it plans to oppose Berkshire's motion.
Ally is also seeking a release from third-party claims over soured mortgage investments as part of ResCap's bankruptcy in an effort to sever itself from costly litigation that has prevented it from paying back a government bailout.
The auto lender still owes $12 billion from a bailout it received during the financial crisis that topped $17 billion. It remains 74%-owned by the U.S. government.
