Tags: Berkshire | Residential | Capital | mortgage

Berkshire Reportedly Wins Residential Capital Loans for $1.5 Billion

Thursday, 25 Oct 2012 03:39 PM

Berkshire Hathaway Inc. won an auction for a portfolio of Residential Capital LLC’s loans with a $1.5 billion bid, according to two people familiar with the matter.

The competing bidder was a group that included Credit Suisse Group AG, said the people, who declined to be identified because they weren’t authorized to speak publicly. ResCap auctioned its mortgage-servicing business to Ocwen Financial Corp. yesterday for $3 billion. Ocwen beat Nationstar Mortgage Holdings Inc. in an auction that would create at least the fifth-largest U.S. mortgage servicer.

Ally Financial Inc., a Detroit-based auto lender majority owned by U.S. taxpayers, allowed New York-based ResCap to file for bankruptcy in May to distance itself from the mortgage lenders’ losses and help repay its 2008 bailout following the U.S. housing crash and subsequent credit crisis. Ally was previously owned by General Motors Corp.

Thomas Marano, ResCap’s chief executive officer, didn’t immediately return a call for comment on the loan auction left at his office.

ResCap, coupled with Ally’s much smaller business, was the fifth-largest mortgage servicer in the U.S. in the second quarter, handling the billing and collections on about $329 billion of mortgages, according to Inside Mortgage Finance, a trade journal. ResCap, once among the largest originators, reduced its assets to $15.7 billion in the first quarter from more than $130 billion in 2006.

Faulty Mortgages

Mortgage liabilities at ResCap from faulty home loans made before the housing bubble burst helped derail Ally’s initial public offering. A successful sale of the unit would allow Ally Chief Executive Officer Michael Carpenter to separate the auto lender from its money-losing unit.

Morrison & Foerster LLP is the law firm handling the bankruptcy case. Centerview Partners LLC and FTI Consulting Inc. are ResCap’s financial advisers.

The case is In re Residential Capital LLC, 12-12020, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

© Copyright 2017 Bloomberg News. All rights reserved.

   
1Like our page
2Share
Companies
Berkshire Hathaway Inc. won an auction for a portfolio of Residential Capital LLC’s loans with a $1.5 billion bid, according to two people familiar with the matter.
Berkshire,Residential,Capital,mortgage
307
2012-39-25
Thursday, 25 Oct 2012 03:39 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved