GMAC Financial Services is quietly making preparations to unload its Residential Capital (ResCap) home loan financing division. Although GMAC has declined tocomment on a possible deal, reports from both Reuters and the New York Post, citing “people familiar with the matter,” confirm that the struggling auto and mortgage lender has hired Goldman Sachs to advise and start the selling process.
ResCap has been bleeding money for some time now. According to GMAC’s latest financial statement, its $5 billion loss during the fourth quarter of last year was “largely affected by losses related to legacy assets in the mortgage operations.” Last month, the company cut over
300 jobs from its ResCap staff and closed the business unit’s North Carolina field office.
According to the Post, it looks likely that billionaire investment guru Warren Buffett might step up and buy ResCap. His company, Berkshire Hathaway already owns a large portion of ResCap’s debt and according to the paper has been interested for months in acquiring the troubled mortgage lender.
The U.S. Treasury and taxpayers own a 56 percent stake in GMAC, after forking over a third bailout in the amount of $3.8 billion in December of last year, three-fourths of which went straight to ResCap. At that time, GMAC said the funding would allow it to sell off some of ResCap’s troubled mortgage-related assets while it explored “strategic alternatives for the business.”
As DSNews.com reported last week, the Congressional Oversight Panel has conducted its own probe into the administration’s bailout of GMAC and is questioning why the Treasury didn’t just let the company go bankrupt since GMAC was not considered a systemic risk to the overall system.
Altogether, the federal government has funneled $17.2 billion into GMAC to help it shore up its balance sheet. The Office of Management and Budget estimates that at least $6.3 billion of that will never be repaid.
Promote your business and services online and offline, find out when our next mixer is.
Connect with other successful women
Real Estate Investing Education, take advantage of today's real estate market
Build Your Business-Drive Your Dream Promo Code: legend
www.TotalSolutionsAlliance.com
No comments:
Post a Comment